Land cover change has been one of the major drivers of change leading to an alteration of critical habitats for many of the threatened species worldwide. Species with a narrow range and specialized habitats such as wetland ecosystems are at higher risk. The present paper describes spatial and temporal land use and cover change over the period of last 34 years (1976–2010) in the Koshi Tappu Wildlife Reserve (KTWR), Nepal. High spatial resolution Indian Remote-Sensing Satellite (IRS) Linear Imaging and Self Scanning Sensor (LISS-4) from 2005 and medium spatial resolution Landsat Multispectral Scanner (MSS) from 1976; Thematic Mapper (TM) from 1989; Enhanced Thematic Mapper Plus (ETM+) from 1999 and TM from 2010 were used to generate a land use/land cover map and change analysis. Acquired IRS LISS-4 and Landsat image was orthorectified into Universal Transverse Mercator (UTM), Zone 45 based on generated digital terrain model (DTM) from a topographic map and Ground Control Point (GCP) from the field. After rectifying all the images, eCognition developer software was used for object-based image analysis (OBIA). The change in the land cover and land use types were compared with the potential habitat of twenty globally significant species present in the reserve. The habitat information was collected from the literature and a map was prepared based on ‘presence’ data, habits and habitats used to identify their distribution pattern. The analysis revealed that the KTWR has gone through significant changes in land cover and ecosystems over the last 34 years due to the change in river course and anthropogenic pressure leading to direct change in habitats of the species. Forests have been reduced by 94% from their original state whereas the grassland has increased by 79% from its original state. On the basis of total land cover, forests, river and stream, swamp and marshes decreased by 16%, 14% and 3% respectively over the last 34 years whereas the grassland has increased by 45%. These ecosystems are also an important habitat for the majority of the species, which is resulting in habitat loss. Notably, the wetland ecosystems (marshes/swamps and river/streams), being one of the most important habitat for many globally threatened species, have changed by more than 30% from their original state in 1976. Based on the analysis, recommendations for management interventions were made.