The Nun Nadi watershed is close to the Dehradun city and some settlements are spread over the Mussoorie hills. Landsat TM images of the year 2000 and 2009 were used to analyze the changes in Land Use/Land Cover (LULC) data employing compound interest formula. The main reason to choose the time period is that Dehradun was declared capital of Uttrakhand state of India in the year 2001. We observed rapid changes in the LULC data in the time period studied. This is primarily due to urban growth that increased exponentially after 2001 near Dehradun city and Mussoorie hills. The highest positive change rate was observed in the built-up and agricultural land which increased 8.39 and 9.92 percent, respectively. Interestingly we noticed that the dense and sparse vegetation shrunk in terms of land coverage, on the other hand, drastic negative change was observed in the bare/barren soil class. Taken together, these results indicate significant changes in various land use categories.