Abstract: The Grand Canal, as the longest mileage and largest engineering key canal water conservancy project in history, plays the functions of water supply, flood control and canal transportation. It has a crucial impact on the traditional habitat along the route, and is closely related to the wisdom of settlement building. The Grand Canal flows through Wenshang County, Jining, which has the highest elevation, the most difficult water management project, the most hydraulic facilities and the most complicated canal management system. During the Ming and Qing dynasties, the local trade and economy flourished, promoting the formation of typical canal settlements. Focusing on Wenshang County, this paper started from interpreting the changes of water environment and canal system in Wenshang County, and conducted geo-information data statistics to interpret the number and positioning of canal settlements. At the same time, this paper sort out canal settlement distribution characteristics and development lineage through in-depth analysis of historical documents, and summarized the regularity of the causes of the settlements. Finally, it discuss the development suggestions of canal settlements under the concept of sustainable development, with a view to providing realistic guidance for the construction of the Grand Canal cultural belt and new-type urbanization.