To examine the variation in water and vegetation coverage areas, the groundwater level and plant diversity in the terminal lake of the Tarim River, northwest China, both the monitoring data of a field survey consisting of surface samples and remote sensing data for 20 years (2000–2019) were analyzed by using field survey and indoor remote sensing methods. The results showed that (1): from 2000 to 2019, water and vegetation areas increased significantly, especially the trend of vegetation areas becoming more significant, with an average annual increase of 13.9 km2/a; (2): the plant diversity increased first and then decreased; the species richness and Pielou index in the study area were 9.0 and 0.80 in 2005, but only 2.00 and 0.08 in 2000, respectively; species composition tends to be simplified; (3): with the increase in the lake area, the groundwater level showed an up-lifted trend; the correlation between the two was significant, but there was a lag in the response of the groundwater level.