With the output of formation fluids, pore pressure in the rock reduced and formation stress increased. Moreover, it can cause great changes of physical properties in the water-drive gas reservoir, such as sharp stress-sensitive effects around the wellbore area etc. In view of the threshold pressure and stress sensitivity’ influences on the transient pressure response in the bottom hole, a water-gas numerical welltest model has been established and solved. The corresponding plots have been drawn and the relative factors have been analyzed. The results proved that influences of stress-sensitive and threshold pressure should not be ignored, and the new model can interpret well test data more correctly than conventional methods.