Virtual Geographic Environment is an avatar-based humans and 3d virtual worlds. Because of the avatar-based human's participation, VGE helps people to make decision based on the understanding of the virtual geographic environment. This paper takes the Lancang River basin as study area which located in the border area of Yunnan province, China. In order to monitor and manage the ecosystem in Lancang River basin, a virtual geographic environment is designed and developed based on a Client/Server structure. A virtual geographic environment Client is developed based on ArcGIS Engine. The client accesses the database though the ArcSDE. The client can help people explore virtual ecosystem in Lancang River basin. The viewer can immerse interact and image in a 3d sense. The viewer can also implement multi layer data query, 3d terrain analysis, spatial analysis, dynamic ecosystem model simulation, such as flood simulation, wild fire simulation etc. In the virtual geographic environment we do not only pay attention to the visualization but also the cognizance. The ecological styles in Lancang River basin are analyzed in 3 different periods (1970s, 1990s, and 2000s) based on the RS images in the 3D scene. The changes of the ecological styles also are analyzed. Several ecosystem models are simulated in 3d scene. The regions where have ecological environment problem will be marked and monitored. After the complex understanding of the virtual geographic environment in Lancang River, a sustainable development strategy can be made to give advice to the study area.