This study presents a quantitative assessment of urbanization effects on hydrological runoff and drainage network in the city of Hohhot, China. The evolution of urban spatial morphology for the historical years (1987–2010) and projected year (2020) is described by changes in geographic information system (GIS)-based land use maps and further represented in hydrological parameters in the Storm Water Management Model (SWMM) simulation. The results show the levels of service of historical drainage were too low to have dominant impacts on flood risks, and hence a significant upward trend in catchment runoff response was observed over time. Comparisons with changes in system overloading indicate that the relative increase in flood risk is greatest at the early stage of urbanization with relatively low levels of development. The proposed adaptation measures based on a cost-effective optimal approach was found feasible to significantly improve the drainage performance and mitigate the increasing flooding impacts.