The current study was taken up to investigate the utility of remote sensing and GIS tools for evaluation of Integrated Wasteland Development Programme (IWDP) implemented during 1997-2001 in Katangidda Nala watershed, Chincholi taluk, Gulbarga district, Karnataka. The study was carried out using IRS 1C, LISS III data of December 11, 1997 (pre-treatment) and November 15, 2002 (post-treatment) covering the watershed to assess the changes in land use / land cover and biomass that have changed over a period of five years (1997)(1998)(1999)(2000)(2001)(2002). The images were classified into different land use/land cover categories using supervised classification by maximum likelihood algorithm. They were also classified into different biomass levels using Normalized Difference Vegetation Index (NDVI) approach. The results indicated that the area under agriculture crops and forest land were increased by 671 ha (5.7%) and 1,414 ha (11.94%) respectively. This is due to the fact that parts of wastelands and fallow lands were brought into cultivation. This increase in the area may be attributed to better utilization of surface and ground waters, adoption of soil and water conservation practices and changes in cropping pattern. The area under waste lands and fallow lands decreased by 1,667 ha (14.07%) and 467 ha (3.94%), respectively. The vegetation vigour of the area was classified into three classes using NDVI. Substantial increase in the area under high and low biomass Photonirvachak 123 RESEARCH ARTICLE 376 J. Indian Soc. Remote Sens. (December 2008) 36:375-386 levels was observed (502 ha and 19 ha respectively). The benefit-cost analysis indicates that the use of remote sensing and GIS was 2.2 times cheaper than the conventional methods. Thus, the repetitive coverage of the satellite data provides an excellent opportunity to monitor the land resources and evaluate the land cover changes through comparison of images for the watershed at different periods.