Accurately simulating the dynamic evolution of the behaviors of different decision-makers (DMs) is essential for identifying solutions to transboundary water conflicts. The purpose of this study is to present a dynamic evolutionary analysis model for simulating the behavior of different water users and solving the problem of transboundary water conflicts. To accomplish this goal, a revenue function, which can objectively evaluate the relative preferences of different DMs in water conflicts, was constructed to improve the graph model for conflict resolution (GMCR) model. A demonstration area in the Yangtze River Delta on ecologically friendly development (DAYRD) in China is applied to demonstrate the applicability of the improved method. The results show that the improved GMCR model based on the revenue function can accurately simulate the dynamic evolution of transboundary water conflicts and avoid the influence of subjective factors of researchers or experts in the traditional method. Additionally, the results indicated that water conflicts in the DAYRD can be transformed from the status quo (conflict) to the target state (cooperation) by effectively controlling the intensity of third-party intervention. These findings provide useful insights for the resolution of transboundary water conflicts and enhance our understanding of the role of third parties in transforming conflict into cooperation.