The upper reaches of the Yangtze River not only serve as a crucial waterway in China’s southwestern region but also function as a conservation area for rare fish species. Recognizing the tendency of current navigation channel improvement projects to overlook the impact on aquatic habitats and the limitations of existing habitat assessment systems, this study specifically focuses on the bifurcation section of the upper Yangtze River. To address these issues, a two-dimensional mathematical model is established to simulate and validate various improvement schemes. An analysis of the flow conditions necessary for fish migration and spawning in this section is conducted, determining optimal flow rates and water levels during spawning and migration periods. A suitability assessment system for spawning and migration is then established, utilizing the four major Chinese carps as representative fish species for evaluation. Through a comprehensive analysis of the results, rational improvement schemes are identified. The findings underscore the importance of considering elevation of dam crest during the construction of sub-dams to regulate the navigation channel, particularly regarding its impact on fish habitats during the dry season. In this plan, the weighted available area of the spawning ground increased by 189,251 m2, 165,860 m2, 89,527 m2, 66,542 m2, and 47,182 m2 under five conditions. Additionally, the evaluation indexes PPA, HFI, and CQI showed increases of 5.011%, 4.176%, and 2.901%, respectively. Moreover, this study refines fish habitats based on their reproductive and living habits, thereby enhancing existing habitat assessment models.