Abstract: In this paper four principles to follow in distinguishing interference from observations of underground water variation are presented. The principles are the correlation of contributing factors, the correlation of spatial variations, the correlation of temporal variations and the correlation of signal intensities. Besides, three criteria for identifying precursory anomalies of underground water variation are also proposed. Firstly the anomalies must have been distinguished from interferences; then there must be observations and theoretical model supporting the correlation between observed anomalies and earthquakes; finally there must be corresponding observed anomalies from other scientific observations. Two inspection cases in using abovementioned principles and criteria are presented. The first case is the distinguishing and removing of the interference anomalies of underground water appeared in Suqian city， Jiangsu province. The second is the conformation of a precursory anomaly that the underground water flow in the Chuan 22 well, in Qionglai city of Sichuan, had shut down during December 2007 to April 2008 before the Wenchuan earthquake.