Watershed modeling is a crucial tool needed for understanding, evaluating, and predicting the adverse impact of water pollution. The watershed model can be divided into an upland watershed model (UWSM) and a downstream waterbody model (DWBM). Neither a single UWSM nor DWBM are able to accurately simulate the pollutant transport along with the surface flow in complex upland watershed−waterbody systems. Therefore, coupled UWSM and DWBM are more desirable. This study categorized the coupled UWSM and DWBM into external and internal coupling models. The coupling mechanism, numerical accuracy, computational efficiency, and applications of these coupling models are discussed. A dynamic bidirectional coupled model for environment simulation (E-DBCM) is consistent with the natural flood and pollutant transport processes, which can improve computational efficiency while maintaining simulation accuracy. Compared with the original coupling models, it possesses three advantages: (1) reasonable coupling mechanisms, (2) complete function, and (3) high efficiency and simplicity. E-DBCM is a potential watershed water environment model, which can be widely used if improved further. The findings of this review will help accurately and efficiently predict and manage pollutants worldwide.