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Climate and human activities change spatial and temporal distribution of water and land use. The Tarim River, the largest inland river in China, faced a long-term exploitation of land and water over a rapid economic development. We analyzed land and water use from 1997 to 2019 in Tarim River Basin by Landsat images, and data on hydrology, climate, population, economy and PM2.5 (air particulate matter ≤2.5 μm). Agricultural land expanded the fastest (4–11%), followed by natural vegetation (15–16%) and water area (4–5%) with population and economic increase. Air quality (PM2.5 μg m−3) improved in upper (62–27) and middle (48–17) reaches. The water area in lower increase 5% because of ecological water delivery since 2000. Land use in the lower reach was dominated by agriculture, where the downstream runoff consumption increased by 6.8 times. The average annual air temperature and precipitation gradually increased by 0.5 °C and 51 mm in source and 0.9 °C and 30 mm in main reaches. The average annual water consumption in upper and middle reaches was 4 × 109 m3, accounting for 87% of input runoff in the main reach. Water consumption in middle reach increased by 33 times in 2009–2017. The industry structure was changing from primary to secondary and tertiary industry. To sum up, implementation of water saving strategies and ecological water delivery restored local ecology. Sustainable strategies should be applied facing industrialization. Furthermore, changing the industry structure and restoring the degraded farmlands to grasslands or forests would keep sustainability of Tarim River Basin.