This study used the Lhasa River Basin, which is a typical plateau basin to clarify the spatiotemporal characteristics of land use change and its impact on a plateau basin habitat quality. The google earth engine (GEE) platform and random forest classification algorithm were used to interpret the land use information of the Lhasa River Basin from 1990 to 2020, and to analyze the spatiotemporal dynamic changes of land use in the past 30 years. The InVEST model was integrated to evaluate the habitat quality of the basin, and to explore the characteristics of its habitat quality changes. The results showed that the efficiency and accuracy of land use classification improved by selecting the vegetation growing season, supplementing and replacing missing data with images obtained in the previous and following years, and generating annual composite cloud free images for land use classification in the alpine and high-altitude areas. An optimal RF classification model combining the spectral, textural, and topographical features of Landsat images was established to classify land use information in the plateau basin. The observed OA, Kappa coefficient, and the F1-score were 88.16%, 0.84, and 0.70, respectively. Since the 1990, the features of the land use change in the Lhasa River Basin have been characterized by “five increases and three decreases,” with an increase being observed in the areas under grassland, construction, forest land, wetland, and water, while the areas under cultivated land, glaciers, and permanent snow or unused land having a decrease. Among them, the growth rate of construction land had the largest increase of 288.35%, while the largest decrease was detected in cultivated land with 50.18%, which could mainly be attributed to overpopulation in the urban areas. Most significant decrease occurred in the unused land area, and the changed area was mainly converted with grassland. During the study period, high quality habitats were mainly distributed in the downstream areas, southwest, and the main source areas of the basin, included the grassland, water, glaciers, permanent snow, and wetland. Poor qualities of habitats were observed in the Lhasa municipal district, Dazi District, Linzhou County, Qushui County, and Mozhugongka County, as well as in the unutilized land in the middle and upper reaches of the basin. The overall habitat quality of the watershed showed an alternating transition pattern of initial decrease, then increase, followed by a decrease, and a slowed down transition, while the habitat quality index increased from 0.53 to 0.57. Population growth and rapid urbanization accelerated the expansion of urban areas and the reduction of arable land, while climate change and ecological engineering played a positive role in improving the quality of habitat in Lhasa River Basin. This study provides a scientific basis and reference for formulating ecological restoration strategies, sustainable land use, and habitat quality improvement in a plateau area.