The Koshi Tappu Wildlife Reserve, established as a protected area under IUCN category IV in 1976, is significantly rich in biodiversity and provides a vast array of ecosystem services. The reserve was also declared as a Ramsar site in 1987 because of its unique wetland characteristics of international significance. The Koshi River, the largest river in Nepal, is the source of life for resources of the reserve. However, changes in river course of the river coupled with human pressure are leading to rapid changes in its land cover, and capacity to deliver ecosystem services. The paper examines the human dependency on the resources of the reserve, land use and cover change over 34-years (1976-2010) and its impact on ecosystem services. Remote sensing data, primary and secondary information on human dependency on ecosystem services to understand capacity of ecosystem to provide ecosystem services, land cover change, human dependency, and implications of ecosystem changes on ecosystem services. Results revealed river/lake, swamp/marshes and forest ecosystems as the most productive ecosystems for provisioning services, where as swamps/marshes, and forest for regulating, cultural, and supporting services. There has been significant lateral shift on river course inducing changes on ecosystems. Capacities of some of the critical ecosystems have been decreasing with changes in area, with negative impacts on ecosystem services and dependency of people. There is an urgent need to address the changing patterns of ecosystems to sustain the flow of ecosystem services as well as biodiversity of the reserve.