Soil drought and lack of organic matter are the key factors limiting the development of astragalus industry in Hexi region of Gansu Province. This study aimed to explore the fertilization methods for soil water storage and fertilizer conservation and soil microenvironment improvement in Hexi region of Gansu Province, in which six treatments were designed for two consecutive years of field experiments, including water retaining agent + organic fertilizer + common urea (B+OM+N), water retaining agent + organic fertilizer + slow-release urea (B+OM+HN), water retaining agent + common urea (B+N), organic fertilizer+common urea (OM+N), organic fertilizer + slow-release urea (OM+HN) and single application of common urea (CK). The effects of different fertilization methods and water retaining agents on soil moisture and nutrient indexes of Astragalus mongholicus were investigated, and their correlation with yield were analyzed. The results show that with the deepening of soil depth, soil moisture is increased first and then is decreased, organic matter, available nitrogen, phosphorus and potassium, MBC and MBN are decreased gradually, NH₄⁺-N and NO₃^--N are increased gradually, and MBC/MBN is increased first and then is decreased. With growth period, soil moisture, NH₄⁺-N and NO₃^--N are decreased gradually, organic matter, MBC, MBN and MBC/MBN are increased gradually, alkali-hydrolyzable N and available K are increased first and then are decreased, and available P is decreased in a fluctuation pattern. B+OM+HN show the highest performance in all nutrient indexes, reed head diameters and root mass per plant of astragalus in different soil depths and different growth stages. Correlation analysis shows that there is significant positive correlation between soil nutrient indexes and yield indexes of Astragalus mongholicus. In conclusion, the application of organic fertilizer, slow-release urea and water retaining agent can improve soil nutrients and microenvironment, and then increase the yield of Astragalus mongholicus. The interaction treatment of slow-release urea and water retaining agent combined with organic fertilizer based on reducing 1/3 nitrogen has the best effect on improving soil microenvironment and increasing yield of Astragalus mongholicus in Hexi irrigation area.