Abstract: non-negative autoregressive model suitable to annual runoff series is developed in this paper after analyzing the defects of present model of annual runoff series. The study in this paper is concentrated in the non-negative AR (1) model which is often used in the simulation of annual runoff series. In the above AR (1 ) model, the relation between the parameters of runoff and those of random term of the model is derived,a new estimation method of autoregressive coefficient is obtained. The results of experiment of Monte-Carlo show that the new estimation methods is much more effective than the present methods.