The inland lakes in arid regions, especially the terminal lakes, are highly sensitive to the influence of human activities and climate change. In order to analyze the evolution of the area of water in Ulungur Lake (Buluntuohai Lake, Jili Lake) and the main causes of those changes, 3S technology, satellite data preprocessing, water extraction and database construction methods are combined with consideration of climatic changes and human activity in this study. The data in this study include 11 phases of remote sensing image data, field mapping data and relevant attribute data of the study area from 1977 to 2017. The results demonstrated that: (1) Over the past 40 years, the change in Ulungur Lake's area was characterized by natural expansion, fluctuation stability, and recovery increase. Significant changes were mainly concentrated in the waters of Zhonghaizi, Xiaohaizi, Camel's Neck, and the waters near Akekule. (2) The period from 1977 to 1995 was the expansion period of the lake water area, and human activities were the main driving factors. The period from 2000–2017 was a smaller period of expansion of the lake water area, with warmer and more humid climate trends combined with human activities driving the change. (3) The water area that was extracted based on the MNDWI water index method can increase the contrast between bodies of water and buildings, which can aid in interpreting and extracting water element information from flat terrain and single types of surface features. This can provide an effective technical means for quantitative and dynamic analysis of the temporal and spatial changes in lake water area.