Land use and land cover change is gaining recognition as a key driver of environmental change. Rapid change of land use has occurred in the red soil hilly region of southeast China in the past three decades due to rural land reform, population pressure and rapid economic growth. In this paper, land use change and its impacts on environmental quality of Xianning County were investigated using technologies of remote sensing (RS), geographic information systems (GIS), and spatial principal components analysis (SPCA). It was indicated that the area of paddy field and upland decline rapidly while the area of woodland, horticulture farm and residential land increased sharply between 1978 and 2002. The driving forces probably were land use policy of the State government, structural adjustment of agricultural sectors and implementation of environmental conservation measures. Based on the assessment of environmental implications of land use practices, the environmental quality of some land use types (i.e. Woodland, sparse woodland, and paddy field) tended to improve, while horticulture farms, water body, and residential land showed a deterioration trend of environmental quality during 1978-2002. Perhaps the most significant finding of this study is that environment appears a negative tendency in the study area from 1991 to 2002, because little attention has been paid to the status and management of agricultural lands, which account for a substantial proportion of total land area. Therefore, for further improving environment in red soil hilly region in China, urgent action is required to improve the advisory services support to farmers on new tillage practices, soil and water conservation practices, raising the efficiency of fertilizer and manure use.