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(1) Background: Dianchi Lake is the largest freshwater plateau lake in southwest China. Since the 1970s, with the large-scale lake reclamation and rapid urbanization, the land use/cover of the Dianchi Basin has changed dramatically, directly hindering the sustainable development of the watershed. It is urgent to study the rationality of land use change in order to promote the “win-win” of eco-environment protection and sustainable economic and social development in Dianchi Basin. (2) Methods: The rationality judgment criteria of land use change in Dianchi Basin was constructed from ecological values, land suitability, laws and regulations, and the rationality of land use change in the Dianchi Basin from 1980 to 2020 was evaluated. (3) Results: The rational degree of land use change in the Dianchi Basin was 71.76%, and the level of rationality was low rationality. The rational degree of change in cultivated land, woodland, grassland, water area and construction land was 74.41%, 69.11%, 77.11%, 3.07% and 98.26%, respectively. Among the irrational land changes, 86.59% of the land had changed to construction land. (4) Conclusions: The main problems of irrational land change in the Dianchi Basin are the massive reduction in high-quality cultivated land, the degradation of woodland, and the unordered expansion of construction land. In order to achieve sustainable development, it is important to protect cultivated land, woodland, grassland and lakes.
