Evaluation of watersheds and development of a management strategy require accurate measurement of the past and present land cover/land use parameters as changes observed in these parameters determine the hydrological and ecological processes taking place in a watershed. This study applied supervised classification-maximum likelihood algorithm in ERDAS imagine to detect land cover/land use changes observed in Simly watershed, Pakistan using multispectral satellite data obtained from Landsat 5 and SPOT 5 for the years 1992 and 2012 respectively. The watershed was classified into five major land cover/use classes viz. Agriculture, Bare soil/rocks, Settlements, Vegetation and Water. Resultant land cover/land use and overlay maps generated in ArcGIS 10 indicated a significant shift from Vegetation and Water cover to Agriculture, Bare soil/rock and Settlements cover, which shrank by 38.2% and 74.3% respectively. These land cover/use transformations posed a serious threat to watershed resources. Hence, proper management of the watershed is required or else these resources will soon be lost and no longer be able to play their role in socio-economic development of the area.