The graph model for conflict resolution (GMCR) methodology was enhanced in this research for addressing cross-basin water pollution conflicts involving heterogeneous sanctions, as a more intuitive and straightforward definition for mixed unilateral improvements was proposed, followed by an integrated procedure for performing mixed stability analyses. Furthermore, the cross-border water pollution dispute that occurred in 2018 in Hongze Lake, China, is systematically modeled and strategically analyzed for the first time, using the improved GMCR method. In addition, an evolution analysis was carried out within the framework of GMCR for verifying the applicability of the eco-compensation mechanism in addressing cross-basin water pollution disputes. This case study demonstrates that the heterogeneity of sanctioning opponents could influence equilibrium outcomes and even change the evolution of conflict situations. Moreover, the developed novel approach is able to accurately predict the equilibrium outcomes of the conflict and provide more strategic insights and valuable findings in making effective conflict resolutions for solving cross-basin water pollution conflicts