Accelerating urbanization and industrialization have had substantial impacts on economic and social activities, changed the surface environment of the earth, and affected global climate change and biodiversity. If reasonable and effective management measures are not implemented in time, unchecked urbanization and industrialization will damage the structure and function of the ecosystem, endanger human and biological habitats, and ultimately lead to difficulties in achieving sustainable development. This study investigates the habitat quality effect of land use transition and analyzes the cause and mechanism of such changes from an economic–social–ecological complex system perspective in the Henan Water Source (HWS) area of the Middle Route of the South-to-North Water Transfer Project (MRP). The study comprehensively examines the characteristics of land use transition from 2000 to 2020. The results indicate that the habitat quality of the HWS area of the MRP decreased slowly over the past 20 years, with a more obvious decrease in the past 10 years. Specifically, the proportion of high quality habitat areas is relatively large and stable, and the medium and low quality habitat areas increase significantly. Analyzing the change degree of the proportion of different levels of habitat quality area in each county, revealed that Dengzhou City had the most dramatic change, followed by the Xichuan and Neixiang counties; other counties did not undergo obvious change. The results of habitat quality factor detection by GeoDetector showed that land use transition plays a decisive role in the change of habitat quality. The types of land use with high habitat suitability compared to those with low habitat suitability will inevitably lead to a decrease in habitat quality. Additionally, elevation, slope, landform type, and annual precipitation are important factors affecting the habitat quality in the HWS area of the MRP, indicating that ecological factors determine the background conditions of habitat quality. The gross domestic product (GDP) per capita, the proportion of agricultural output value, grain yield per unit area in economic factors, population density, and urbanization rate in social factors affect the spatial differentiation of habitat quality to a certain extent. Soil type, annual mean temperature, vegetation type, and NDVI index have weak effects on habitat quality, while road network density and slope aspect have no significant effect on habitat quality. The results of this study provide a basis for the improvement of habitat quality, ecosystem protection and restoration, land resource management, and related policies in the HWS area of the MRP. They also provide references for the research and practice of the habitat quality effects of land use transition in other regions.