Abstract: Grading evaluation and obstacle factor diagnosis can greatly contribute to the modernization construction level of the large-scale irrigation districts under complex operating environments. Taking the Hetao Irrigation District as the research object, this study aims to determine the connotation and the key characteristics of the irrigation areas, according to the current requirements of the agricultural and rural modernization. The index system was established to evaluate the modernization, thus considering the water resources exploitation potential, agroclimatic particularities, socioeconomic development level, and actual conditions in the surrounding region. After that, 27 indicators were taken from the well-equipped, highly efficient water-saving, scientific management, and the ecologically sound aspects. Four grades were divided after assessment, according to the supporting construction and modernization of the large-scale irrigation areas. An improved entropy method was used to assess the weight of each index. The matter-element extension analysis was applied to evaluate the construction level of the modernization. The performance was obtained to compare the SPA–VFS coupling mode. The obstacle degree model was also introduced to identify the key obstacle factors on the modernization. The results show that the maximum correlation degree of the indicators was -0.191 between the modernization level and the grades. The modernization level was marked as Grade II, which was largely achieved the benchmarks. The modernization construction level was marked as the Level II using SPA-VFS coupled model. There was the better consistence with the matter-element extension suitable and feasible for the evaluation of modernization. The multi-indicator nature of the grading was tailored into the modernization level. The matter-element extension was much simpler computation than the SPA–VFS coupling model. The key obstacle factors were obtained to currently affect the modernization level, including the proportion of the high-efficiency water-saving areas, irrigation water use efficiency, irrigation water consumption per unit area, remote-monitoring coverage rate of the automated sluice gate, water consumption per 10000 yuan of the agricultural added value, proportion of the salinized area, drainage standard attainment rate in the irrigation areas, water-supply reliability in the irrigation. The approach can also provide a strong reference to evaluate the modernization level of the irrigation in the Yellow River middle reaches of the Inner Mongolia, Northwest China.