Abstract: By interpretation of TM images respectively in 1986 and 2000,the map of current land use of Lancang watershed in Yunnan was compiled.Through overlaying,spatial analysis and statistic analysis supported by ArcGIS 8.3 software,the map of land use change from 1986 to 2000 and the area transfer matrix of land uses in the given study area were obtained.The spatial distribution pattern and change rule of land use and land cover in this area were showed,and the environmental impacts caused by the change of land use types were analyzed.It was shown that the change could bring a series of environmental issues,such as watershed soil erosion,biodiversity decrease and landscape fragmentation.