Biodiversity is fundamental to human well-being and economic development. The Yangtze River, the largest river in China, faces biodiversity loss due to habitat degradation, climate change, and other anthropogenic threats. However, the long-term changes in the region's biodiversity remain poorly understood. Here, we constructed an optimized living planet index (LPIO) by combining Partial Least Squares Structural Equation Modeling and Random Forest Modeling. Using data from a monitoring network of 536 sites, we observed an increasing trend in terrestrial bird diversity and functional complexity across the entire watershed from 2011 to 2020. Our findings indicate that a large-scale ecological restoration program has contributed to increases in terrestrial and aquatic bird diversity in the Yangtze River Basin. In contrast, bird diversity in the downstream area has decreased by 2.83%, largely due to a rapid decline in wetland birds. The degradation of wetland habitats and insufficient conservation measures have negatively impacted bird diversity in the downstream region. This suggests that although there have been significant improvements in terrestrial bird diversity, more effective wetland restoration is necessary for biodiversity conservation. We recommend optimizing the national large-scale biodiversity monitoring network and increasing the number of upstream monitoring sites.