Abstract The uncertainty of socioeconomic development and climate change poses challenges to the sustainable management of water resources in Taiyuan, China. The study proposes a type-2 fuzzy chance-constrained ordered multi-objective fractional programming (T2FCC-ORMOFP) model to address the allocation of water under uncertainties. The model incorporates type-2 fuzzy programming and chance-constrained programming into an overall framework to handle multiple uncertainties under multi-level and multi-objective conflicts, while using fractional programming to reflect the marginal benefits of the system. It prioritizes the principles of optimal, fair, and stable distribution by the upper-level governing authorities, while considering the social and economic environmental benefits of lower-level decision-making. The optimal water allocation scenarios were obtained under different hydrological guarantee rates, violation levels of water supply constraints, and net economic benefits of type-2 fuzzy numbers for 2030. Additionally, groundwater is replaced by reclaimed water in varying proportions for flexible water supply. The results show that the water demand in Taiyuan cannot be ignored, and the risk of water shortage is more sensitive for the agricultural and industrial sectors. The recycled water substitution strategy can optimize the water supply structure and improve social and economic benefits (9–12%). Also T2FCC-ORMOFP can improve overall efficiency (20%) compared with a single-level model.