The Beijing-Hangzhou Grand Canal carries unique social and cultural significance as a world cultural heritage, but with the acceleration of global urbanization, it has potentially severe environmental risks under continuous anthropogenic disturbances. Therefore, to protect the ecological and cultural values of the Grand Canal, it is necessary to assess the corresponding relationship of water quality to land use and the perception of ecosystem services that focus on cultural ecosystem services (CES). This study aims to analyze the water quality response to land use in the Beijing-Hangzhou Grand Canal, describe the land use types closely related to water quality, and propose corresponding management strategies for enhancing CES. This study investigated the impacts of land use structure and landscape pattern on water quality by calculating the correlation between land use structure and landscape pattern indices and water quality in buffer zones of different distances on both sides of the canal. The results show that green land dominates the land use structure and can effectively reduce water pollution in the canal. On the other hand, urban impervious surfaces showed a significant positive correlation with pollution contributing to low water quality. We accessed the impact of water quality on the perception of CES in the Beijing-Hangzhou Grand Canal and proposed optimization strategies for promoting CES. Both content analysis and thematic analysis were applied to analyze the impact of the water environment quality of the Beijing-Hangzhou Grand Canal on the perception of CES. We found that the perceptions of CES along the Beijing-Hangzhou Grand Canal are associated with the public’s opinions on its cultural heritage services and artistic inspiration services. The perceptions of CES are closely related to the quality of the water environment and riparian greenness, which affect the values of cultural heritage and conservation of the Beijing-Hangzhou Grand Canal.