Protected areas (PAs) form the backbone of global conservation efforts. Although many studies have evaluated the impact of PAs on land cover, human disturbances, and people's welfare, PAs' impact on wildlife habitat quality remains poorly understood. By integrating wildlife habitat mapping and information of 2183 rural households, we assessed the impacts of nature reserves (a type of PAs) across the entire geographic range of giant pandas (Ailuropoda melanoleuca) on panda habitat suitability change between 2001 and 2013 using the matching approach. We found the impact of nature reserves is concentrated in areas susceptible to human pressure, where 65% of the habitat suitability increase is attributable to the nature reserves' protection. The impact of nature reserves has spilled over to nearby unprotected areas and enhanced habitat suitability there. Nature reserves supported by the central government showed higher performance in improving habitat suitability than their counterparts supported by local governments. Older nature reserves perform better than those established more recently. Our results also show that local households' participation in tourism and labor migration (people temporarily leaving to work in cities) enhanced the ability of nature reserves to improve habitat suitability. These results and methods provide valuable information and tools to support effective management of PAs to enhance the habitat quality of giant pandas and other wildlife species in China and elsewhere.