In this study, a parameterization method based on Landsat‐7 ETM data and field observations has been proposed and tested for deriving surface reflectance, surface temperature, NDVI, MSAVI, vegetation coverage, LAI, net radiation flux, soil heat flux, sensible heat flux and latent heat flux over heterogeneous landscape. As a case study, the methodology was applied to the experimental area of the CAMP/Tibet, which located at the central Tibetan Plateau. Two scenes of Landsat‐7 ETM data were used in this study. The scene of 9 June 2002 was selected as a case of summer, and the scene of 2 December 2002 was selected as a case of winter. To validate the proposed methodology, the ground‐measured surface reflectance, surface temperature, net radiation flux, soil heat flux, sensible heat flux and latent heat flux are compared to Landsat‐7 ETM derived values. The results show that the derived surface variables and land surface heat fluxes in two different months over the study area are in good accordance with the land surface status. These parameters show a wide range due to the strong contrast of surface features. Also, the estimated land surface variables and land surface heat fluxes are in good agreement with ground measurements, and all their absolute percent difference is less than 9.9% in the validation sites. It is therefore concluded that the proposed methodology is successful for the retrieval of land surface variables and land surface heat fluxes using the Landsat‐7 ETM data and filed observations over the study area.