The increase of urbanization level has led to the rapid increase of impervious surface area (ISA). The aim of this work is to clarify the relationship between the ISA and water quality and lay a foundation for the improvement and protection of the water quality in the basin. Taking the Fuxian Lake Basin in Yunnan Province as an example, based on the Landsat ETM+ remote sensing image and the Gram–Schmidt (GS) image fusion algorithm, the four-terminal model and the linear spectral mixture model (LSMM) were used to extract the impervious surface of the watershed from 2006 to 2015. And statistical methods were used to distinguish its relationship with water quality. The results show that the four-terminal model and the linear spectral mixture model can effectively extract the impervious surface information of the Fuxian Lake Basin. The average root mean square error (RMS) of the image decomposition results from 2006 to 2015 was less than 0.02. In the past 10 years, the ISA has changed significantly in the Fuxian Lake Basin. The ISA showed an overall upward trend from 2006 to 2015. It increased from 24.73 km2 in 2006 to 35.14 km2 in 2015, an increase of 10.81 km2. From the value anomaly, the ISA in 2006 and 2009 is lower than the multiyear average, and those in the other years are higher than the multiyear average. The percentage of ISA in the basin was significantly positively correlated with Chemical Oxygen Demand-Mn (CODMn) and total phosphorus (TP) (r is 0.772, 0.763), and the correlation in the flooding season was greater than that in the dry season. The ISA threshold for water quality deterioration is around 10% in the Fuxian Lake Basin. Reducing ISA coverage, controlling ISA to less than 10%, and preventing nonpoint source pollution during flooding season will be the best measures to effectively improve the water quality environment in the basin.