Abstract: Peatland swamp in the Zoige Plateau has been shrinking rapidly since 1950s, where one of the important mechanisms causing water loss in peatland is headward and lateral erosion of natural gullies. Natural gullies drain partially surface water in rainfall season and groundwater in non-rainfall season, both of which accelerate the shrinkage of the swamp. Field observations were conducted in the Zoige Peatland in summer of 2016-2017 and Visual MODFLOW groundwater model was used to study groundwater movement in local peatland and the influence of natural gullies on hydraulic gradient in peat layer near the gully. Results indicate that the movement direction of groundwater is more inclined to the gully greater than that along the terrain slope. Moreover, this trend is more pronounced after the gullies cut through the peat layer, i. e., the hydraulic gradient in the direction perpendicular to the gully increased by about 79%. It definitely shows that the natural gullies could not only drain off surface water in rainfall season, but also facilitate the loss of groundwater on peatland on both sides of gullies during non-rainfall season. This drainage process leads to the formation of dewatering belt on both sides of gullies. This study is of great importance to the adoption of the targeted measures to protect the peatland in Zoige Plateau from cutting through by the gullies.