In order to analyze the hydraulic characteristics of the leaky water distribution system (WDS) caused by earthquake, the method to calculate the leakage flow of WDS in a possible earthquake was improved by introducing the formula suggested by Japan Water Works Association (JWWA) to calculate the failure probability of pipes in an earthquake, and the hydraulic model for leaky WDS caused by earthquake was established. A novel method of hydraulic calculation named “two-step iteration” was developed specially to simulate the WDS with deficient operating pressure, so as to realize the quantitative analysis of leakage flow, pressure and flow of WDS in different earthquake intensities. Finally, the proposed model and method were implemented to predict the performance of a sample networks in different earthquake intensities based on the EPANET software. The prediction results indicate that the proposed model can describe the hydraulic characteristics of damaged WDS in a possible earthquake reasonably; the presented method can avoid the iteration divergence and improve the rate of iteration convergence in the process of hydraulic calculation. Furthermore, the model can be solved by the existing calculation software directly.