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Understanding the effects of land use change on evapotranspiration (ET) and its partitioning to transpiration and evaporation is important for accurately evaluating the likely environmental impacts on watershed water supply, climate moderation, and other ecosystem services (e.g., carbon sequestration and biodiversity). This study used a distributed hydrologic model, MIKE SHE, to partition evapotranspiration into soil evaporation, transpiration, ponded water evaporation, and interception, and examined how the ET partitions affected the water balance in the Qinhuai River Basin from 2000 to 2013. Simulated daily ET was compared to measurements at an eddy flux research site during 2016–2017 (R2 = 0.72). Degradation in rice-wheat rotation fields and expansion of impervious surfaces impacted not only total watershed evapotranspiration, which showed a significant downward trend (p < 0.05), but also its partitioning. A significant (p < 0.01) decrease in transpiration was detected. Ponded water evaporation was the only ET partition that exhibited a significant positive trend (p < 0.05). We concluded that the reduced transpiration as a result of land use and land cover change was the primary factor driving the variation of watershed scale evapotranspiration. In addition, there was an increase in annual water yield (23%) as a response to significant reduction in ET (7%) due to a 175% expansion of urban area in the study watershed. Our study provided insights to the mechanisms of land surface–water cycle interaction and better understanding of the effects of land use change on urban micro-climate such as “urban dry island” and “urban heat island” effects.