Water resources carrying capacity (WRCC) is the basis for sustainable regional development and an important indicator of core competitiveness, and its quantitative assessment and comparison is a key link in clarifying the development capacity of the region. The study comprehensively considers economic, social, resource, environmental and ecological factors, constructs a WRCC evaluation index system based on the Pressure-State-Response (PSR) model, adopts the entropy value method to assign weights to each index, and utilizes the set-pair analysis method and the obstacle diagnostic model to evaluate WRCC of the urban agglomerations in central Yunnan (UACY) in the period from 2008 to 2020. The results show that the comprehensive development of WRCC of UACY is characterized by stage-by-stage evolution in the time dimension, with a decreasing trend in the carrying capacity from 2008 to 2012, and an overall fluctuating upward development trend from 2013 to 2020. In the spatial dimension, Kunming’s WRCC is generally poor, and Honghe and Yuxi have the greatest advantages in water resources storage and conservation capacity. The stress of water use in Kunming is higher, but Kunming has advantages in industrial structure and water resources development and utilization rate. Through the diagnosis of obstacle degree, the main obstacle factors of WRCC have large differences among cities (states), but the main subsystems constraining WRCC are all pressure subsystems. The results of the study can provide data support for water resources related policies and rational water resources dispatching in the UACY.