A few relatively large reservoirs, hundreds of small reservoirs, and numerous farm dams were built in the upper Gan River Basin, China. The operation of such a reservoir network can serve as a significant source of variability in the local hydrological regime and should be included in research to better understand the interaction between multiple hydrological processes and watershed management. In this study, a reservoir network module that included reservoirs of multiple sizes was developed and fully integrated into the coupled land surface and distributed hydrologic model system (CLHMS), for a detailed description of the hydrological impact of a reservoir network. A generalized release scheme was employed to determine the outflow of both large and small reservoirs. The integrated model was then evaluated against observations and reanalysis data, which indicate that the model can reasonably reconstruct the reservoir operation, streamflow, and other hydrological variables. Results quantitatively demonstrate that a reservoir network can result in an increased streamflow in dry seasons, a decreased streamflow in wet seasons, a generally larger groundwater discharge, higher groundwater level, a slightly damper soil condition, and a larger amount of evapotranspiration at the basin level. With the integrated model, it is feasible to achieve more sustainable watershed planning and management.