In recent years, water quality degradation associated with rapid socio-economic development in the Taihu Lake Basin, China, has attracted increasing attention from both the public and the Chinese government. The primary sources of pollution in Taihu Lake are its inflow rivers and their tributaries. Effective water environmental management strategies need to be implemented in these rivers to improve the water quality of Taihu Lake, and to ensure sustainable development in the region. The aim of this study was to provide a basis for water environmental management decision-making. In this study, the QUAL2K model for river and stream water quality was applied to predict the water quality and environmental capacity of the Hongqi River, which is a polluted tributary in the Taihu Lake Basin. The model parameters were calibrated by trial and error until the simulated results agreed well with the observed data. The calibrated QUAL2K model was used to calculate the water environmental capacity of the Hongqi River, and the water environmental capacities of CODCr NH3-N, TN, and TP were 17.51 t, 1.52 t, 2.74 t and 0.37 t, respectively. The results showed that the NH3-N, TN, and TP pollution loads of the studied river need to be reduced by 50.96%, 44.11%, and 22.92%, respectively to satisfy the water quality objectives. Thus, additional water pollution control measures are needed to control and reduce the pollution loads in the Hongqi River watershed. The method applied in this study should provide a basis for water environmental management decision-making.