Changes in fish habitat induced by dam construction in the downstream river have been well documented in an increasing body of literature. Fish habitats in the backwater zone of dams have undergone dramatic changes, which have still remained poorly understood. This study aims to provide a more complete understanding of fish habitat distribution and clarify fish habitat utilization patterns in the upstream dam in order to adopt effective remediation activities. This study was conducted in the Three Gorges Dam (TGD) as it is the world's largest installed capacity hydropower station, with a backwater zone length of about 660 km. Four major Chinese carp (FMCC) were selected as target fish species, and fish habitat distribution upstream of TGD was assessed by integrating the swimming ability and environmental preference of different fish species into their critical life stages. Assessment results at different life stages of the target fish species showed that June was a critical period for spawning activities FMCC in the fluctuating backwater zone of TGD. The riverbank was an important feeding habitat for FMCC, and the high‐velocity flow in the centre of the channel exceeded the limits of the swimming ability of target fish. The fish habitat distribution in the fluctuating backwater zone of TGD was heavily affected by runoff from April to September and by dam operation from October to March of the next year. This work provide valuable information about river conservation and management in the upstream of TGD.