Water transfer is an effective approach to improve water quality in the lake. However, there is almost no research focusing on optimum efficiency of water transfer. As a case study of West Lake in Hangzhou City, total phosphorus (TP) model with environmental fluid dynamic code (EFDC) was built. And the water quantity across Sudi, velocities in different layers and water quality were verified. The spatial and temporal distributions of TP concentration with and without internal circulation water transfer were analyzed. The results show that, after increase the internal circulation water transfer, the water in low concentration area was transferred to the high concentration area, which can decrease the TP concentration in high concentration area. Because of the decrease of water quantity in low concentration area, TP concentration was increased in low concentration area. However, the average concentration in the whole lake was remained fairly static. In the condition of same external diversion, the concentration of water quality is more evenly distributed after increase internal circulation water transfer, which has an advantage to avoid the eutrophication in high concentration area. Increase of internal circulation water transfer has a guiding significance for improving the water quality in West Lake, and provides a reference for the similar lakes.