Land Use and Land Cover Change (LULCC) is a major driver of environmental problems like water pollution, decreased soil quality, and natural resource scarcity. Measuring LULCC is necessary to better understand the present condition of watersheds. Time series LULCC mapping using Geographic Information Systems (GIS), high-resolution imagery, and field data collection are effective methods for examining LULCC trends. The Mahadev Khola watershed in Bhaktapur, Nepal, acts as a primary source of drinking water for people living within the Bhaktapur municipalitywhich is dominated by forest at higher elevations and agricultural lands and settlements at lower elevations. The purpose of this study was to observe LULCC dynamics within the Mahadev Khola watershed to better understand the social and environmental problems that can arise in consequence. Time series land use maps were created and analyzed using GIS methods. Responses from a survey of local people, as well as interviews from selected key stakeholders, contribute insight into how past scenarios of land use have influenced-and have been influenced by-LULCC. Significant changes in land use were quantified between 2005 and 2014. Results suggest that in this period, total forest area decreased by 6.25%, cultivation area decreased by 14.28% and settlements increased by 156.25%. Survey and interview responses suggest that much of this change is due to agricultural intensification and an increase in chemical fertilizer and pesticide use. Increased agricultural inputs have increased the potential for river and water pollution and long term soil degradation. Urban expansion and development have led to the contamination of rivers with sewage and solid waste, which has increased health risks for local communities. Although total forest area has increased, the species composition has changed-now primarily dominated by Pinus roxburghii. The result of this is a decrease in river water discharge and increase in soil and water acidity. The results of this study are timely and important for analyzing the dynamics between LULCC and watersheds in order to improve future management efforts in Nepal and the Eastern Himalayan region of South Asia.