Based on the dimidiate pixel model, the changes of fractional vegetation coverage and its influence factors were analyzed by using the MODIS vegetation index in 2000—2012 during the period of returning farmland to forest in Yanan City. The results indicated that the fractional vegetation coverage in Yanan City was increased by 53.9%, which was changed from 43.4% to 66.8%. Fractional vegetation coverage in the districts and counties of Yanan City was increasing in fluctuation, and those of Zichang County, Yanchuan County and Yanchang County were increased greatly by 212.8%,134.2% and 127.8%, and those of Huanglong County and Huangling County were increased by 28.9% and 29.2%, respectively. The fractional vegetation coverage was generally improved steadily and remarkably, and the area with remarkable improvements took 74.04% of the total research area, inconspicuous improvements took 23.91% and remarkable degenerations took 2.05%; the area with high coverage and moderate coverage in the research area were increased while the area with low coverage was decreased. In the early stage, the area of returning farmland to forest can be listed in descending order as follow: low coverage area, high coverage area, and moderate coverage area, while in the later stage the descending order are: high coverage area, moderate coverage area and low coverage area, which showed that the coverage structure in the research area was improving. The changes of coverage were influenced little by precipitation amount from June to August, and it had strong positive correlation with the accumulated conversion area of farmland to forest. Therefore, it can be concluded that the implementation of returning farmland to forest increased the vegetation coverage and improved the structure of fractional vegetation coverage. As plants are more and more capable of adjusting to the environmental changes, the inter-annual variations of precipitation have decreasing influences on the fractional vegetation coverage.