Fuxian Lake is one of the most important freshwater supply lakes of China; however, its water quality is affected by the land degradation in its basin inevitably. This study aimed to monitor and simulate the spatiotemporal characteristics of land degradation in Fuxian Lake Basin. A comprehensive land degradation index (LDI), which integrates the indices for land use/land cover (LULC), vegetation coverage (VC), water loss and soil erosion (WLSE), wind erosion(WE) and soil moisture content (SMC), was proposed to describe the spatiotemporal characteristics of land degradation in 1990–2015; a CA‐Markov model was used to simulate and forecast the land degradation in 2020 and 2025; and the mechanisms behind land degradation were analysed. The results showed that: (1) the degree of land degradation from 1990 to 2015 generally decreased, the severe years of land degradation occurred in 1990, 2000 and 2005, and the total area of degraded land remained steady at around 250 km2 from 2005 to 2015; (2) the land degradation in different years was primarily moderate, with few severe or extreme degradation; (3) the simulated land degradation would remain relatively stable in 2020 and 2025, and the degraded area was slight fluctuation compared with that in 2015; and (4) the land degradation in this region was driven by both human factors and natural drivers. Therefore, some land degradation control measures should be set in advance for protecting this important supply area for freshwater.