Istanbul is one of the largest metropolitan cities in the World. The city has experienced rapid industrialization and urbanization in the second half of the twentieth century. Between 1950 and 2000, the city has grown by an average of 4.5% annually. Given the scale of the growth, neither local nor the central governments have shown capability of controlling the influx of migration, most of which settled illegally on public lands. Most of the settlements lack the basic sewerage facilities, and a significant portion of which are on the major water resource basins. As of today, Istanbul Metropolitan Municipality (IMM) not only has to cope with the infrastructure problems, but also has to find ways of solving the problem of illegal occupations of public lands and water resource basins. This paper presents the land use changes in the water resource basins providing water to the Istanbul Metropolitan Area. Using four consecutive Landsat images between 1990 and 2005, the changes in 12 different land use categories are obtained via overlay operations by GIS for water resource basins surrounding the City of Istanbul. It has been observed that the most critical land use changes are in the nearest basins to the city. The capability of Landsat and IKONOS images in determining the alterations in the macro form of the city are also discussed. Finally, possibility of utilization of new technologies in policy making regarding environmental management in Istanbul is discussed.