Rapid population growth and economic development in the Asia-Pacific Region has resulted in serious local, national and regional environmental problems such as floods, droughts, forest fires, dust storms, air, water and soil pollution, desertification, salinization, water resource depletion, and soil erosion. Such problems are a serious constraint to sustainable development in the region. The Integrated Environmental Monitoring (IEM), a sub-project of Asia-Pacific Environmental Innovation Strategy (APEIS) project, aims to develop an integrated environmental monitoring system that can be used to detect, monitor and assess environmental disasters, degradation and their impacts in the Asia-Pacific Region. The system employs data primarily from the MODIS (Moderate Resolution Imaging Spectrometer) sensor on the Earth Observation System (EOS)-Terra/Aqua satellite, as well as those from ground observations. The IEM achievements in the last two years can be concluded as follows: (1) IEM established an integrated monitoring network system under the auspices of the National Institute for Environmental Studies (NIES) in Japan and the Institute of Geographic Sciences and Natural Resources Research (IGSNRR) of the Chinese Academy of Sciences in China, and expanded it with additional participation by the National University of Singapore and the Commonwealth Scientific and Industrial Research Organization (CSIRO) in Australia. The network has already covered most of the Asia-Pacific Region. (2) IEM also established two data-analyzing centers at NIES in Japan and IGSNRR in China. These centers store a wide variety of satellite data produced not only by different sensors, but also by various ground-based measurements. A data-processing system for deriving the higher order environmental indices from MODIS data was also completed. The products can be used to detect and monitor environmental disasters/degradations and indices for vulnerabilities. They can also be used as inputs to a range of models for assessing climate change, ecological conditions and agricultural production. (3) Although numerous satellite-derived indices in the Asia-Pacific Region have already been produced by other projects/organizations, most have yet to be calibrated or validated by ground-truth data so that they might contain significant uncertainties. Thus, IEM established five validation sites in a variety of ecosystems in China, as follows: grassland, dry field, paddy field, forest, and semi-arid area. The data gathered at these sites include information related to radiation, meteorology, and soil and vegetation. The data can be remotely downloaded through a satellite network. Using these consistent and quality assured datasets, IEM can produce accurate and reliable information specific to the region. (4) A MODIS data based integrated watershed management model is developed to assess conditions and changes in ecological goods and services such as fresh water resources and food production. With this model and the above information, strategic policy options for sustainable watershed management will be explored.