Functioned as the "kidneys" of the earth, wetlands provide comprehensive eco-environmental and productive services in terms of flood mitigation, climate control, pollution prevention, soil-erosion reduction, environment beautification, biodiversity maintenance and bio-productivity protection. In China, most wetlands are distributed in the northwest part. Research on wetlands in semi arid region is very important and meaningful. Defining the location and width of interlaced zone is the basement to have quantitative study of its ecological process. In consideration of there is little research on identifying the interlaced zone boundary of semi arid area and small-scale wetland-dry grassland, this paper is based on the theory that changes of ecotone boundary can indicate the transformation of ambience in advance. Si'er Tan wetland, which is located in Yanchi county, Ningxia province, was studied by line transect methods. Four transect lines, centered on the wetland, ran into four directions: N, E, S and W respectively. These lines went through three main ecological areas including wet zone, interlaced zone and typical dry zone. Field investigations have been done every July to September during the year 2006 and 2010. In this paper, we first discussed the feasibility of using Moving Split-Window Technique in determining the interlaced zone boundary between wetland and dry grassland in semi arid area. Secondly, take Si'er Tan wetland for instance, Moving Split-Window Technique was used to identify the width and boundary of wetland and dry grassland from the year 2006 to 2010. Health condition of the whole wetland ecosystem can be known through analyzing the changes of width, boundary and vegetation of the interlaced zone during these five years. The results show that: Moving Split-Window Technique can be used to define the interlaced zone boundary. According to the dimension of investigatory scale and the visibility of ecotone transitivity, appropriate window width can be chosen especially in the selection of appropriate smallest window width. What's more, precipitation is the primary determinant factor of defining the location and width of interlaced zone but does not have substantial influence on vegetation variation. The distance between interlaced zone and the core area of the wetland can determine species richness index. By analyzing the data and making comparisons, wetland health condition shows significant differences. Owing to the built of the reserve, interlaced zone width got larger in the year 2006 and 2007, as a result, Si'er Tan wetland health condition had turned better. While from the year 2008 to 2010, the shrink of interlaced zone indicated the degradation of wetland, which as a result of railway construction disturbance. Results above prove that wetland-dry steppe alternated zone, which is always very sensible, can predict the transformation of the whole wetland ecosystem. In future development and degradation research of semi arid region wetland, we can focus on the study of interlaced zone evolvement. This method is feasible and much easier to make health evaluation for the whole wetland ecosystem. It can also provide new solutions and ideas to find and solve protection and improvement problems of wetlands in semi arid region.