Study region: The Huanggou Catchment (HGC), located in the upper Han River Basin (UHRB). Study focus: As the water source area for the Middle Route of the South-to-North Water Diversion Project (MR-SNWDP), runoff availability in the UHRB is crucial for project operation. However, the UHRB has experienced a significant decline in runoff since the 1990s, posing a threat to the MR-SNWDP. Although previous studies have identified reduced precipitation as the dominant factor, the specific processes linking precipitation changes to runoff reduction remain unclear. Moreover, existing projections generally neglect vegetation dynamics, introducing considerable uncertainty. In this study, we integrated comprehensive observational data and future climate scenarios with the WAVES model to: (1) reveal runoff generation differences between wet and dry periods, (2) quantify the differences between dynamic and static vegetation schemes in future projections, and (3) assess future water resource trends under climate change. New hydrological insights for the region: Results indicate that reduced precipitation exerts a limited effect on evapotranspiration and base flow but causes a substantial decrease in the magnitude of lateral flow, leading to a significant reduction in total runoff during dry periods. Furthermore, comparative experiments demonstrate pronounced differences between dynamic and static vegetation schemes in future projections, particularly for runoff. Critically, projections indicate that increased precipitation and reduced Leaf Area Index (LAI) will jointly enhance future runoff in the HGC.