The Yanggong River is a littler anabranch of upper reaches of the Changjiang River, a representative area in northwest Yunnan Province with complicated terrain and relief conditions, furthermore, there are different nationality and culture background between the upper basin and the lower. After the earthquake happened in February, 1996 and the Lijiang old town was included in the United Nations′ “world cultural heritage” list in next year, the floating population quantity was increased quickly, which leads to intensification of the contradict between human beings and the limited land resources, the paper explored to study the holistic environmental changes on the watershed area scale. Multitemporal remote sensing imageries associated with referenced data such as terrain data and ground survey data were applied to construct the expert classification model based on the knowledge engineer, using the geography information system (GIS) and geo-statistics technology to obtain the conversion matrix of the landscape changing in the drainage area from year 1986 to 2000 for the quantitative analysis on the evolution of spatial pattern. The results suggested that during 1986-1996, the environmental condition of the watershed is deteriorated; but from 1996 to 2000, the landscape changing verified the increase of the forest cover rate due to the action “return the grain plots to forestry” from then on. However, at the same time, the area of the culture land use type is increased at a high speed.