Under the influence of human activities, the unary water cycle has been transformed into a “natural–social” dualistic water cycle, and the analysis of driving mechanism of the water system under the dualistic water cycle has become an important proposition for sustainable human-water development. This study explored the connotation, framework, and structure of the Water-Ecological-Economic (WEE) system. The WEE system encompasses water resources, society and economy, water use efficiency, water environment, and water ecology subsystems which interact functionally. And system dynamics is used to drive the evolution of system coupling. For each subsystem's characteristics, its sustainability evaluation index is proposed. MDM-TOPSIS combination evaluation model is applied to calculate the weights of indices and the sustainability comprehensive indicator of WEE system. Taking Nanyang in China as a case study, the results show that the sustainability of the WEE system has a downward trend in the early stage, but in the middle and late stages, ecological and environmental protection is considered, the sustainability level shows an upward trend with the support of several safeguard policies. The WEE system and its sustainability assessment theory proposed in this study will provide scientific support to water resources management and sustainable development planning.