Beijing is experiencing a shortage of water resources. Its rapid development and dense population have caused an extreme demand for water. This study quantifies the water footprint of Beijing at the sectoral level using a modified input–output model and estimates the impacts of freshwater use by life cycle impact assessment. The results suggest that the main water source of Beijing industries is groundwater, which is quite different from the main use of surface water in China. By coupling the input–output model with the eco-indicator 99 method, the environmental impact of the water footprint was quantified. The results show those sectors that introduced severe impacts in 2002 and continued to make large impacts in the following 5 years; the major impact of water use is resource depletion. In addition, the inconsistency of the eco-indicator points and the eco-indicator index of sectors leads us to control sectors with large eco-indicator points and develop those with small eco-indicator indexes. Furthermore, a regional comparison was conducted using the eco-scarcity method and verified that Beijing is under severe water pressure, with a value ranked fifth nationally. We conclude that the control of groundwater use and the externalization of local water pressure should be prioritized in water management in Beijing.