In order to analyze the phytoplankton diversity in the backwater area of Pengxi River before and after the impoundment of the Three Gorges Reservoir (TGR) to the water level of 156 m, the variation of algae community of Pengxi River had been observed from July 2007 to January 2008. According to the water level variation in TGR, the time was divided into three periods:July-September, October and November-January. The algae diversity of five sites in Pengxi River was assessed using Shannon-Weaver diversity index H'. Moreover, the Connell's intermediate disturbance hypothesis was applied to analyze the impact on algae diversity caused by hydrodynamic conditions' variation during the impoundment process. Before 156 m impoundment, the mean H' index was 3.466 ± 0.317, declined to 3.246 ± 0.338 in October and recovered to 3.431 ± 0.352 during the high water level period. Before impounding, the Pengxi River was of riverine-type, with flow and rainfall being the main physical disturbance factors affected the disturbance intensity and algae diversity. As a result of water level suddenly risen and the flow severely droppen, the disturbance intensity increased compared with the impounding period. After 156 m impounding, the Pengxi River was at the high water phase, the less rainfall and stable flow reduced the physical disturbance, so the H' index recovered and maintained at a relatively stable state.