A shortage of water has limited the socio-economic development of the Heihe River Basin in northwestern China and has led to many ecological and economic problems. Only the development and application of integration tools can effectively represent the functionality of the watershed and aid in strategic decision making. In the framework of SME, modular and hierarchical model building can simplify the research work. According to the main ideas and key processes commonly used in distributed hydrological models, and combined with the spatial characteristics of the mountainous region of the Heihe River Basin, a unit hydrological model was developed using stella, which was an icon-based software package specifically designed for dynamic systems modeling, and an algorithm for spatial distribution in SME was introduced. This paper describes only the model structure and basic equations, whereas in the next paper, model calibration results using the data measured at meteorological stations, together with land use data and soil data, will be further introduced.