The main goal of this study was to evaluate the environmental condition of two watersheds, called Ribeirao das Cabras and Ribeirao Piracicamirim, both part of the 'Piracicaba' River Watershed (Sao Paulo State - Brazil), using Remote Sensing and Geographic Information System (GIS), in order to provide subsidies to land use planning. Tendencies and potentialities were identified in each area in order to study the land use adequacy using different scenarios and propose a land use planning for both regions using environmental planning concepts. All information layers were integrated and analysed to generate land use capacity maps. These maps, together with maps of possible protected areas, according to the environmental laws, were compared to the actual land use, leading to maps of conflict areas for both watersheds, which were studied and compared through methods and specifics criteria to identify tendencies and potentialities for both areas. The natural and cultural attributes, main degradation processes, development tendencies and potentialities identified in each area, and the available legal instruments, were the basis for a guideline for conservation and protection of these areas through environmental planning concepts, which showed to be very important and adequate to the occupation planning process.