Because of the limited availability of arable land and the heavy population pressure in China, the government has enforced agricultural policies such as the cultivation of grasslands, domiciliation, combined agro-pastoral land use, and household production responsibility system to resolve the problem of food shortage and promote sustainable development in inland China. The pastoral region of the semiarid zone in Inner Mongolia, however, witnessed environmental deterioration in the form of desertification due to the expansion of cultivated land, excessive firewood consumption, and overgrazing. Hence, the government implemented environmental policies such as the prohibition of pasturage and the so-called ecological migration since the beginning of the twenty-first century to prevent desertification and further environmental deterioration. At the same time, urbanization has rapidly advanced in Inner Mongolia due to resource development and industrialization, which not only led to the expansion of the existing urban area but also resulted in the growth of small towns in rural regions. While numerous studies on the environmental changes in Inner Mongolia after the post-1978 reforms have been done, little is known about the regional differences with regard to the land use in the whole of Inner Mongolia after 2000. This study aims to clarify the regional differences with regard to the land use change in relation to the environmental policies and urbanization between 2000 and 2005. The author conducts a quantitative analysis of the data concerning the area of land use types for each county in 2000 and 2005 calculated by the Inner Mongolia Land Survey Institute based on the satellite image analysis. In analyzing the distribution of land use types, factor analysis is applied to the data matrix of the percentages of land use types with 178 (89 counties by 2 time periods) rows and 9 (land use types) columns. To grasp the changes of land use types, the author analyzes the difference of factor scores for each county between the two time periods. Four factors with an Eigen value of 1.0 or higher is extracted and a varimax rotation is applied to these factors. These factors can be labeled as "farmland", "urban land use", "woodland vs. grassland", and "degraded land", respectively. By applying cluster analysis to the factor scores, the counties are classified into five types of the regions: urbanized area, agro-pastoral region, grasslands, forests, and degraded land. Little change in the distribution of these types regions between 2000 and 2005 is observed. Nevertheless, difference of factor scores in each county between two time periods reveals the regional variations of land use change within Inner Mongolia. Increase in the scores for Factor 1 that represents the expansion of farmland show that agriculture has spread from agro-pastoral region to semi-arid region. Increase in the scores for Factor 2 concerning urban land use indicates that urbanization has advanced in the cities in the drainage area of the Yellow River and other industrial cities. Positive scores for Factor 3 indicating increase woodlands and decrease grasslands are found in the eastern and southern part of the study area, which reflects the farmland afforestation policy. The decrease in the scores for Factor 4 appears in the periphery of the Keerqinzuoyizhong desert and Ordos plateau, which indicates that desertification has settled down. On the other hand, increase in the scores for Factor 4 in the drainage basin of the Yellow River shows that desertification and soil alkalization supposedly caused by irrigation or draught hazard have taken place there. As shown in this paper, the effect of the recent transition of government policy can be observed in land use changes. In addition, the result of this study shows that major cities and their surroundings are influenced by urbanization.