The reasonable setting and scientific application of the drought-limited water level (DLWL) of reservoir is of great importance for the safe and efficient use of water resources. Existing researches does not fully consider water supply guarantee rate and shortage ratio requirements when determining the DLWL, and the use of optimization methods makes it difficult to apply. To conquer these problems, firstly grading and staged DLWL is defined. Then a multi-objective optimization method that maximize water supply guaran- tee rate and minimize water supply shortage ratio of all water users is proposed. Based on the optimization results, the annual variation law of DLWL is analyzed and the critical period in which DLWL has the greatest influence on water supply is explored. Finally, a simple method to calculate DLWL is proposed, which is fast, convenient and suitable for engineering application. The results show that the annual variation of the DLWL is consistent with the distribution of water consumption during the year, and the drought warning water level during the high water use season and the drought preservation water level during the dry season have a great impact on water supply, which helps to adjust originally determined DLWL in the simple method. If the DLWL is not set or set according to the existing optimization method, serious water shortages occur. When the DLWL is set by the optimization method and simple method proposed in this article, the reservoir water supply system properly limits water supply in advance and avoid the occurrence of subsequent serious water shortage events. It makes both probability and severity of system water shortage events meet requirements, and improves drought resistance. This study provides an optimization method and a scientific and convenient method for the water conservancy department to formulate reservoir DLWL and guide reservoir drought resistant operation. © 2022, China Water Power Press. All right reserved.