The plateau lakeside Kunming city has experienced three decades of rapid urbanization and high economic growth since 1978 when China adopted reform and “open-door” policy. Dianchi watershed in which Kunming city is located also experienced the serious deterioration of ecological system from the late 1970s. In search of a viable way to coordinate between urban growth and protection of freshwater lake, objective of this paper is to monitor land use/land cover change of Kunming city through the methods of Remote Sensing (RS), Geographic Information System (GIS), spatial metrics and Moran's I. index. The results show that land use/land cover change in Kunming city is characterized by the sprawl of urban built-up area and the decrease of agricultural land. Urban built-up area has gradually replaced agricultural land to be the most dominant land use type in the study area. Urban growth of Kunming experienced a “clustered-dispersed-clustered” process, sprawling like an expanding pancake. There is very limited space for urban built-up area to further expand. Upon the analysis of the aspects that affect the sprawl characteristics, several useful suggestions were made for the authority and planners.