Socioeconomic development has led to increased consumption of both blue and green water. Consequently, China is facing serious water scarcity issue. However, few studies have investigated interactions of blue and green water footprints, as well as driving forces underlying the changes in water footprints across provinces and sectors. To fill in this knowledge gap, we quantified the spatial-temporal dynamics of the blue and green water footprint (BWF and GWF, respectively), and analyzed the key factors that drive the provincial-level changes in BWF and GWF from 2002 to 2012. The analysis is facilitated by the approaches of multi-region input-output analysis and structural decomposition analysis, and we developed one decoupling index to quantify the water-economy relation and substitution between green and blue water. The results show that China's BWF averaged at 161 billion m3/yr, about one-third the size of the GWF. In addition, water scarce provinces in Northern China were moving towards decoupling between economic growth and blue water consumption, with GWF playing an increasingly important role. The changes in the WFs were mainly influenced by changes in affluence (final demand per capita), technological improvements (decreased direct water consumption intensity), and consumption pattern (composition of the final demand) rather than changes in the population and export. Technology improvement, consumption pattern shift and industrial structure adjustment contribute to WF reductions, thus help improve water security and sustainability in China. This study provides a new approach to analyze water-economy relations for water scarce countries.