This paper explores the watershed land use and ecosystem services value (ESV) space-time evolution characteristics in the Tarim River Basin in China’s arid northwest. The study applies spatial correlation analysis using Landsat TM remote sensing images for 1990, 2000, 2010, and 2018. The land use data are extracted and the ESV coefficients are adjusted accordingly. The results show as follows: (1) From 1990 to 2018, land use in the Tarim River Basin changed significantly. Construction land, cultivated land, and water exhibited an increasing trend, while grassland, forest land, and water indicated a decreasing trend. Construction land increased the most, while water decreased the most. (2) Overall, ESV in the Tarim Basin charted a downward trend, from 872.884 billion RMB in 1990 to 767.165 billion RMB in 2018. From 2015 to 2018, the Basin’s ESV suffered the largest declines, with grassland ESV accounting for over 39% of the loss and adjustment services accounting for over 62%. (3) During the study period, the spatial distribution of ESV in the study area showed spatial distribution characterized that was either high in all directions or low in the middle, with significant positive spatial autocorrelation. The spatial distribution of ESV dynamic changes showed that ESV value-added regions were distributed in the southeast portion of the study area, while the ESV loss regions were distributed in the western and northern portions of the study area.