Research on land use or land cover changes in the coastal areas of China has received little attention. The Laizhou Gulf, located in Shandong Province of China, was investigated to assess land use change dynamics by using Landsat™ satellite images of two periods, 1988 and 2002; ground-based information; and geographical information systems. The land uses were grouped into six categories: cropland, forestland, grassland, urban and/or built-up land, water, and barren land. The results indicated that land use since 1988 has changed significantly. The total area of cropland rapidly decreased from 2249.9 km² in 1988 to 2223.5 km² in 2002, decreasing by 26.4 km²; water area decreased from 433.5 km² in 1988 to 414.8 km² in 2002, decreasing by 18.7 km²; and barren land area decreased from 128.3 km² in 1988 to 93.6 km² in 2002, decreasing by 34.7 km². Concurrently, continuous increases of other land use types occurred between 1988 and 2002: grassland increased by 13.6 km² from 99.7 km² to 113.3 km², and urban and/or built-up land increased by 94.9 km² from 824.4 km² to 919.3 km². These alterations were natural and human induced. These factors expose coastal areas of Laizhou Gulf to environmental hazard, namely, saltwater intrusion. Manmade interventions and actions, such as construction of coastal structures and exploitation of aquifers without adequate knowledge of the hydrology setting and an adequate management program, worsen this natural hazard. Uncontrolled human activity induces environmental damage to the overall coastal plains. The impact of saltwater intrusion on land use changes in the area is also discussed.