Urbanization-associated land use and land cover (LULC) changes lead to modifications of surface microclimatic and hydrological conditions, including the formation of urban heat islands and changes in surface runoff pattern. The goal of the paper is to investigate the changes of biophysical variables due to urbanization induced LULC changes in Indianapolis, USA, from 2001 to 2006. The biophysical parameters analyzed included Land Surface Temperature (LST), fractional vegetation cover, Normalized Difference Water Index (NDWI), impervious fractions evaporative fraction, and soil moisture. Land cover classification and changes and impervious fractions were obtained from the National Land Cover Database of 2001 and 2006. The Temperature-Vegetation Index (TVX) space was created to analyze how these satellite-derived biophysical parameters change during urbanization. The results showed that the general trend of pixel migration in response to the LULC changes was from the areas of low temperature, dense vegetation cover, and high surface moisture conditions to the areas of high temperature, sparse vegetation cover, and low surface moisture condition in the TVX space. Analyses of the T-soil moisture and T-NDWI spaces revealed similar changed patterns. The rate of change in LST, vegetation cover, and moisture varied with LULC type and percent imperviousness. Compared to conversion from cultivated to residential land, the change from forest to commercial land altered LST and moisture more intensively. Compared to the area changed from cultivated to residential, the area changed from forest to commercial altered 48% more in fractional OPEN ACCESS Remote Sens. 2015, 7 4881 vegetation cover, 71% more in LST, and 15% more in soil moisture Soil moisture and NDWI were both tested as measures of surface moisture in the urban areas. NDWI was proven to be a useful measure of vegetation liquid water and was more sensitive to the land cover changes comparing to soil moisture. From a change forest to commercial land, the mean soil moisture changed 17%, while the mean NDWI changed 90%.