The objective of this research is to investigate the extent of land-cover change in and around Stockholm from 1986 to 2006 and the nature of the resulting landscape fragmentation with a particular focus on the possible environmental impact. Four scenes of SPOT imagery over the Stockholm area were acquired for this study: two on 13 June 1986, one on 5 August 2006 and one on 4 June 2008. Various image processing and classification algorithms were tested and compared. The best classification results were obtained using an object-based and rule-based approach with texture measures as well as spectral data as inputs. The image pairs from the two decades were classified into seven land cover categories for Stockholm Municipality, i.e., low-density built-up, high-density built-up, industrial areas, open land, forest, mixed forest and open land, and water. The overall accuracies were 93% (kappa: 0.91) for 1986 and 97% (kappa: 0.96) for 2006. Landscape fragmentation and change was evaluated using spatial metrics. The spatial metric results reveal that urban areas increased at the expense of non-built up areas by around 2% both on the municipal and regional levels. The 2006/2008 classification gives evidence of being a more fragmented landscape than that of 1986. While urban areas have become denser within Stockholm municipality, which is in line with the region's development policy, more natural land cover types have at the same time been eroded; a development not in line with the regional goal of maintaining the area's green spaces. The classification technique used on the municipality will be expanded to the region as a whole, and regional trends and consequent recommendations will be the focus of future research.