Abstract: Water category by different quality is a philosophy of water supply and recycling by quality. Wastewater recycling is one method that treats and comprehensively utilizes the industrial wastewater and domestic sewage after scientific classification based on multiple purposes. The water quality requirements of water supply in an enterprise vary at different processes and so does the water quality of wastewater from different workshops. The water and wastewater were classified into different levels according to their qualities and the wastewater was treated and reused among different levels. The optimal solutions were obtained with minimum wastewater treatment costs as objective function and minimum wastewater discharges as constraints. A production line of a typical process in a pharmaceutical factory was taken as an example to perform optimization of circular cascade reuse of water resources of various workshops. The results showed that the annual fresh water volume of 244 900 tons with a cost of 612 300 yuan was saved, compared to existing circulating water and calculated by local water price of 2.5 yuan per ton tap water for industrial use.