The spectrum characteristics of TM band 1 to 5 and band 7, as well as Normalized Difference Vegetation Index, Normalized Difference Water Index, Normalized Difference Moisture Index, and Modified Normalized Difference Water Index, are analyzed by using TM images of 4 August 1994 and 16 September 2004. The falsecolor images with bands 7, 4 and 3 combined are used to identify the wetland with human eye and the signs of the Ruoergai wetland on the TM imagery are established．The analysis shows that the band 7 can be used to distinguish sandy lands from the other land cover types, and the difference of Modified Normalized Difference Water Index and Normalized Difference Vegetation Index can be used to identify water bodies effectively with the threshold being greater than 0. The better classification result can be obtained automatically. The result shows that compared with in 1984, the area of lake and wetland in 1994 is less obviously, and the area of sandy land is larger.