Karst plant habitats are generally harsh and vulnerable to climate and human interferences. Restoration of karst vegetation and its effect on water resources are affected not only by climate and anthropological interferences but also by different bedrock lithologies. In this study, changes to climatic factors, vegetation indices of the normalized difference vegetation index (NDVI), the leaf area index (LAI) and runoff during 1982–2015 were statistically identified over the Yangchang river basin (YRB) with two contrasting bedrock lithologies (carbonate rock and detrital rock) in southwest China. The Budyko equation and the hydrological model in LPJ (the Lund-Potsdam-Jena Dynamic Global Vegetation Model) were calibrated and improved to separate runoff change that could be attributed to climate and vegetation changes during 1982 ~ 2015. LPJ was used to predict the potential vegetation for natural recovery without human interference and its effect on the hydrological budget in YRB. Results reveal that the execution of the major ecological restoration project (the Grain for Green Project) in YRB since the early 2000 s has significantly increased NDVI and LAI even in the drier period of 2004 ~ 2015. However, the human effort of vegetation restoration only reaches about 25% of the potential capacity in the whole study area. The reforestation in YRB could decrease runoff by about 7.0 to 7.6% in the period from 2004 to 2015, and 11.2% in the future when vegetation shifts from artificial to natural vegetation recovery. Meanwhile, thick soil in the non-carbonate area can store more water to support a large proportion of forest, and raise drought resistance. However, the limited water holding capacity of weathered bedrock in the carbonate area restricts large tree growth, and thus reduces drought resistance. These results point a need for consideration of how bedrock geology influences available water limitations when designing suitable reforestation strategies in southwest China.