Because of the importance in the process of geothermal energy development and utilization, water level monitoring of geothermal wells is generally normalized, especially for enhancing resource management and reasonable use of geothermal resources. Currently, the water level measurement is mainly carried out inside the geothermal well casing by directly putting down the measuring line or making use of measuring tubes installed side by side on the pump pipe as channels for measurement. The measuring accuracy would be affected by the tangling of submersible pump pipe & cable and measuring line with the former; and the measuring requirements could not be met because of the imperfect system with the latter. To solve these difficulties, a set of water level monitoring tube system outside casing was developed based on the communicating principle and the feasibility and practicability were proved by the installation test in test well. The paper introduces this system about its working principle, structure design and installation test process, the test results are analyzed and evaluated.