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One of the important approaches to allocate water resources is system dynamics approach. In this research, the water allocation from the Gerati Dam reservoir was investigated using the system dynamics approach. Model input data included meteorological and hydrological data, downstream water demands (in this study, environmental and agricultural demands) and reservoir geometry. The model developed in the VENSIM software is able to calculate the volume of water being released from Gerati dam based on input data and continuity equation (water balance of reservoir) to supply downstream demands with respect to the maximum allowable lack. The analysis of the reservoir performance indicated that the Gerati dam can prioritize the environmental demand and then supply the water needed in the agricultural sector, according to the cropping pattern, in the area of 1217 hectares for the first 25 years and in the area of 1050 hectares for the second 25 years of the operating period. Also, as a result of the construction of the Gerati dam, net revenue per cubic meter of agricultural water will increase from 671 Rials to 2604 Rials. In addition, after the implementation of the plan, in addition to providing the total forage required in the present situation, 18550 livestock units could be added to the current livestock units of the region to make entrepreneurship for the residents and improve the economic situation of the villagers.