Western Hunan is one of few well-preserved traditional cultural landscapes in China. As such, research on and conservation of this area with respect to both cultural ecology and biodiversity are considered important. With traditional Dong settlements in Huaihua as the research milieu, this paper first describes traditional feng shui concepts and incorporates modern ecological niche ideology to explore the driving factors behind the spatial patterns of traditional settlements and the construction methods employed in their development. The aim of this research is to provide a sound theoretical foundation for ecological niche expansion and spatial structure evolution of traditional settlements. Our study reveals that traditional settlements and the natural environment in Western Hunan have attained a harmonious equilibrium over time. Spatially, this is manifested as a unique settlement pattern with local Chinese characteristics. Settlements are bordered by mountain forests in all directions and are constructed around large, open, central spaces, reflecting the "mountain-forest-house-water-forest" spatial settlement concept, which conforms to the principles of feng shui. In addition, most of the residential buildings of the Dong settlement in Tongdao, Western Hunan, are positioned west to east, facing the sun, facing the water, and against the mountains. These settlements can be conceptualized as unique complex ecosystems formed under the joint influences of three major factors, that is, nature, economics, and culture. The elements of the systems interact with one another in complex ways, directing the development of the settlements, ensuring the survival of their residents, and producing unique cultural characteristics. As traditional settlements expand, it is important that planners remain mindful of the ways in which these areas have developed and evolved. They should ensure that projected development trajectories for these areas will protect their unique identities and preserve the delicate balance that currently exists between their human and natural systems by facilitating effective integration of physical, social, and economic factors as these systems adapt and evolve over time. When considering ecological niche expansion with regard to the settlements, traditional planning approaches cannot be ignored; however, they need to be adapted to incorporate planning with respect to population growth control, the cultivation of environmental awareness among residents, and the development of nonagricultural industries to augment farmers' income. In the meantime, relevant policies and standards need to be formulated to guide the orderly development of traditional settlements and to curtail injudicious construction of new buildings in these areas.