Terrestrial ecosystem water balance refers to the state between inputs from precipitation, and outputs including evapotranspiration, groundwater recharge and runoff. The Three River Source Region (TRSR) is known as the “water tower of Asia” and is an important water source region for much of southeast Asia. Spatial and temporal distributions of water balance have changed within the TRSR under recent changing climatic conditions. However, the status and variation of water balance under the influence of environmental factors remain unclear. We used a daily time step ecosystem water model (SOILWAT2) and 35 years data for 29 meteorological stations to describe water balance across the TRSR and found that 15 of the sites represented a net water source (precipitation > actual evapotranspiration) between 1981 and 2015. Stations at intermediate elevations (3400 to 4100 m) and low latitudes (< 34°N) were net water sources; stations at lower and higher elevations as well as higher latitudes were not sources because of moisture limitations by a dry climate. In contrast to a strong spatial pattern, we found no obvious temporal trend of the net water source. The interannual and seasonal variability of the net water source is dependent on the temporal fluctuations in potential evapotranspiration and precipitation. We therefore suggest that there is an elevation and latitude dominated spatial pattern of the water balance on the TRSR, with important implications for the availability of water resources.