Watershed delineation based on DEMs in the GIS environment is a fundamental work for hydrological analysis. But the feature difference between normal and inter-watershed watershed has long been ignored. This text believes that existence of inter-watershed must be taken into account during watershed delineation and analysis. In this paper, an overall explanation of basic concepts and characteristics of inter-watershed is presented, and a method of extracting inter-watershed automatically based on DEMs is introduced. Experimental results in the Loess Plateau region show that inter-watershed could be extracted accurately and quickly after a comprehensive consideration of water accumulation threshold, terrain feature and the boundary of data. Generally speaking, flat topography may lead to the wrong position of outlets of watersheds, which can be corrected with help of rivers' DLG data. And if boundary of the data is not the dividing crest, it's difficult to determine whether a watershed whose dividing line consists of data's boundary is inter-watershed or not. Comparison of inter-watershed and normal watershed in terms of spatial form, spatial distribution and hydrological characteristics based on experimental results show that inter-watershed performs notable features. Firstly, spatial pattern of inter-watershed is clump and tends towards stability with growing minimum catchment area settled. Secondly, the amount of inter-watershed depend on the number of runoff node that means that it has a power function with minimum catchment area in the test area. And a good linear relation between average area of inter-watershed and average area of normal watershed could be found in the experiments. Thirdly, spatial shapes of inter-watershed make it collect water quickly if threshold value is settled larger than 0.4 km2 based on the statistic of shape index of the inter-watersheds extracted in the experiment area. In conclusion, the concept of inter-watershed is defined firstly and its basic characteristics are also interpreted. The method introduced contributes to ensure the correctness of watershed delineation. The study on inter-watershed is of great significance not only in fluvial geomorphology research but also the theories and methods of digital terrain analysis.