In view of the significant hydrological and ecological role of wetlands, an analysis was made on the impact of land use and land cover dynamics on the spatial status of Zhalong wetland, a Ramsar site located downstream of Wuyuer River Basin in Northeast China. The impact assessment analyzed multi-temporal changes in the upstream land use/land cover characteristics of the wetland watershed using remote sensing data of Landsat MSS/TM. The multi-temporal land use/land cover statistics revealed that significant changes have taken place in the Wuyuer River Basin. In response to these upstream land use/cover changes, the marsh landscape in Zhalong wetland has showed changes in spatial extension, landscape pattern, and water quality characteristics. The major impacts have resulted from construction of a reservoir and water diversion engineering that has altered the wetland hydrological conditions and reduced the spatial distribution of the marsh landscape. In addition, inputs of agricultural nutrients, and industrial and human wastes from the upper catchments have resulted in increased signs of eutrophication. This study suggests that effective wetland hydrological restoration measures are needed to avoid further deterioration of this internationally important ecosystem.