Low impact development (LID) has been widely used to manage stormwater, but evaluations of the benefits of implementing LID need to extend up to the watershed level. Modelling is an important method and this paper proposes an approach that focuses on modelling LID in watersheds using the Storm Water Management Model (SWMM). There are two ways to simulate LID in a SWMM. The first is using the LID editor, and the second is simply adjusting the parameters in the basic SWMM. In the proposed methodology, these two ways are combined. The methodology was applied to one of China’s pilot sponge -cities, Tsingtao. The results show that the method can improve the efficiency and guarantee the accuracy of the model at the watershed level. Use of LID application in the pilot area can significantly reduce runoff volume, but the effect is different in different sub-watersheds.