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China is the most populated country in the world with slightly more than half of the population is still living in rural areas. In the past couple of decades, rapid urbanization and industrialization have significantly changed the land use/land cover (LULC) pattern in rural areas, particularly those around the big cities in eastern China. Shandong Peninsula, a traditional agriculture area, also has witnessed rapid urbanization and industrialization. Analysis of land use/land cover change in this area, specially the change of agricultural lands, would help us better understand the interaction between government's policies and farmers’ economic interests. This paper developed a method to extract single-cropping land, double-cropping land and other land use/land cover categories for 1978, 1999 and 2006 from seasonal variations in Normalized Vegetation Index (NDVI) during a crop calendar year. Spatial analysis results indicated significant changes of arable lands and other land use/land cover categories due to the urbanization and industrialization. The most possible reason is due to the continuous adjustment of government's policies and shift of farmer's economic interests. Results from this study would help government make wise decisions in the near future to mitigate urban sprawl and industrial development while maintain enough agricultural production.