Environmental problems resulting from human displacement and resettlement are considered to be secondary impacts of hydro projects. There is a significant gap in knowledge concerning the environmental consequences of resettlement of the Three Gorges project (TGP), China. This study examines critical environmental problems associated with the TGP resettlement. It reveals that the contradiction between the land inundation and demand for land in resettling rural residents is a critical environmental issue. On the positive side, countermeasures that are discussed include: engineering works for farmland protection, developing eco-agriculture, reforestation and constructing a green belt in the peripheral zone of the reservoir, and adjustments to resettlement policy.