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• This paper constructed a framework for green water assessment in the Loess Plateau gully region using MIKE SHE model. • A new concept and extraction method for green water components was defined based on existing research. • A new concept of the potential of green water was defined in relation to the dried soil layers' classification indicators. • We assessed the dependence on green water components and potential for environmental changes. Exponentially increasing water demand and increasingly uncertain hydrological conditions due to climate change (CC) and land use/cover change (LUCC) undoubtedly pose significant challenges to the sustainability of water systems in arid and semi-arid regions worldwide, and even more so in the rain-fed agricultural area of the Loess Plateau (LP) in China, where green water supports all ecological landscapes and most agriculture. Therefore, an accurate assessment of green water resources is crucial for regional development. This paper constructed a comprehensive framework for assessing green water resources based on the MIKE SHE model, defined a new concept of green water components (GWCs) that can be extracted based on existing studies, proposes the potential of green water (GW P), and present a research methodology. To validate this research framework, we applied it to a typical basin in the LP gully area of the Nanxiaohegou (NXHG) basin. The model was calibrated using runoff data from basin outlet stations to extract four GWCs: high-efficiency green water (GW H), low-efficiency green water (GW L), unused green water (GW U), ineffective green water (GW I). We then assessed the GW P of the basin and analyzed its trends, consistency, and dependence on changing environments. The assessment framework is simple and easy to use, providing valuable information for regional revegetation and basin water management, and is highly recommended for replication in other regions. [ABSTRACT FROM AUTHOR]