Abstract: The Ruoergai swamp had been experiencing a rapid degradation since 1960s. However, the mechanism causing the degradation in Ruoergai swamp remains unclear, as a few studies concerning the issue can be found. The rapid degradation of swamp affects the wetland ecosystem and causes a reduction of flow rate draining into the upper Yellow River. In this study, we investigate the mechanism using the combined approach of field studies conducted in 2010—2013, and analyzing meteorological and hydrological data and remote sensing images. Results show that climate change may not be the main cause of the wetland degradation as the overall amount of annual precipitation remains steady in spite of a slow rise in temperature in the past 50 years. The analysis of remote sensing images reveals that there exists an artificial drainage system with a total length of 920 km developed for animal husbandry purposes. Water is thus drained from wetlands by the system, which causes a reduction of 648.3 km² in Ruoergai swamp, accounting for up to 27% of the wetland degradation. Therefore, excavated artificial ditches as an intense disturbance of human activity are an important reason on rapid shrinkage of swamp. Headcut erosion of countless tributaries inside the swamp continuously draining water, lowering groundwater water level and cutting into the inside of swamp, is another important natural degradation mechanism. Connection of artificial channels and natural river networks strengthens the effect of riverbed incision and drainage.