Protected areas form the backbone of biodiversity conservation, yet their effectiveness is often not known nor even evaluated [1, 2, 3]. China—best known for its record of ecological degradation in the face of rapidly increasing gross domestic product and resource consumption [4]—has in recent years enacted a series of policies and programs to conserve its natural resources. Chief among them is an ambitious protected area system covering 17% of its terrestrial land mass [4, 5]. An important early impetus for the establishment of this reserve system was the protection of the giant panda (Ailuropoda melanoleuca) [5, 6, 7, 8]. Using data from two previous large-scale surveys [9, 10] separated by a decade, and including over 50,000 habitat plots, we examined the panda population and habitat trends inside and outside reserves. Despite ambitious ecocompensation programs in panda habitat outside reserves [11, 12, 13], the protection provided by reserves reduced most classes of human disturbance compared to outside reserves, and most disturbances decreased through time more strongly inside than outside reserves. Reserves also contained more and increasing suitable panda than found outside reserves [14, 15]. Comparing reserve performance, reserves with increasing older forests and bamboo correlated with increasing panda populations. Together these findings indicate that China’s panda reserves have been effective and that they are functioning better over time, conserving more and better habitats and containing more pandas. While China’s protected area system still has much room for improvement [4, 5], including to support pandas [16], these findings underscore the progress made in China’s nascent environmental movement.