This article provides insight into land use dynamics and policy implications from local perspectives in the Jinghe watershed of northwestern China. Spatial and temporal data were used to analyze the land use changes. A survey was conducted to investigate farmers' perceptions and the factors causing these changes. A transition matrix and weighted index were used to make quantitative comparisons between land uses and farmers' perceptions from 1980 to 2003. The results show that land use changes occurred predominantly in forests and grasslands. Land use continues to shift between agricultural land, grasslands, and forests. Governmental policies, market demand, personal willingness, and a desire to conserve land resources are the primary driving forces behind changes in land use. From this research we conclude that a comprehensive resource conservation strategy should build resource conservation into policy making, institutional reforms, local participation, indigenous technology, population control, and ecological migration.