Yanggong River is a tiny anabranch of upper reaches of the Changjiang River. Its drainage are consists of Lijiang basin and Heqing basin

and is a representative area in northwest Yungui Plateau. Furthermore

there are differeat natiouality and culture background between the upper basin and the lower. Before late 1990s

urbanization process in Yanggong River drainage area is spontaneous

after then

it has been quickened

especially the county seat of Lijiang and Heqing. Spatial pattern of urban and rural residential area has changed greatly

which was reflected mainly in spatial diffusion. With the changes

the problem of how can we realize sustainable development of urban and rural residential area in scale

form

pattern and function in a certain spatial and temporal range shonld be paid attention to. The paper explores the method to extract urban and rural residential information of research area by remote sensing technology

using imitated ratio of vegetation index（RVI）to extract the spatial information from the Landsat TM images of 1996’s and 1999’s

measuring fractal dimensions to explain urban and rural residential area complexity and stability with time out

and comparing the pattern characteristics of the two county seat cities. According to the bigger residential fractal dimension value of total residential area in 1999 than 1996’s and the contrary result while excluding the county seat of Lijiang and Heqing

we find that the Lijiang city and Heqing city become more complex and unstable from year 1996 to 1999

but the pattern changes of rural residential area is different. Although the changes of residential area pattern are caused by many factors that interact with each other

the function of various factors is different. We study the dynamic mechanism for facilitating the pattern of the residential area on the bases of research pattern

and find that the earthquake happened in February

1996 and opening of the highway from Dali to Lijiang passing through Songgui basin in 1998 are primary factors influencing the Lijiang and Heqing city and rural residential area along the road. And the flourishing tourism is also important

which leads to the different change rate between Lijiang and Heqing in past three years.