This study examined the extent of resource use and the level of degradation consequent upon land use. Three distinctive trends were observed in terms of forest and land cover dynamics. These are forest degradation, deforestation and regeneration. The paper integrated both, topographical map of 1969 and satellite imageries from Landsat MSS 1972, and Landsat TM 1991 and 2000 with ground truthing and socio-economic surveys to assess changes in forest resource use and land cover in South-western Nigeria. The satellite images were analysed using ILWIS software version 3.4. Based on ground truth data and remotely sensed data, the study area was classified into five categories using the supervised maximum likelihood classification technique. The accuracy assessment was carried out on the remotely sensed data. A total of 30 points for each dataset were selected for this operation and the overall accuracy of 90%, 86.7% and 85% respectively was obtained from the three image datasets. Results showed three dominant ecological communities in Oluwa Forest Reserve while two effects of changes on species were identified. The first was the replacement of what could be considered as the original species by other species tolerant to the ‘new’ ecosystem. The other was the reduction in the range of the original species that could be found. This was an indication that the area had been fragmented comparing to its original status. Results suggest that resource utilization and land cover change dynamically over time. The study also revealed that the creation of forest reserve to restrict local access and resource use would have been an effective tool for regulating encroachment and logging activities if there was an effective enforcement of regulation. It is therefore obvious that the main aim of environmental management should be the protection of the natural living space of humankind and integration of environmental scarcity in making decision on all economic issues and activities.