Abstract Protected areas are typically considered a cornerstone of conservation programs and play a fundamental role in protecting natural areas and biodiversity. Human‐driven land‐use and land‐cover (LULC) changes lead to habitat loss and biodiversity loss inside protected areas, impairing their effectiveness. However, the global dynamics of habitat quality and habitat degradation in protected areas remain unclear. We used the Integrated Valuation of Ecosystem Services and Trade‐offs (InVEST) model based on global annual remotely sensed data to examine the spatial and temporal trends in habitat quality and degradation in global terrestrial protected areas. Habitat quality represented the ability of habitats to provide suitable conditions for the persistence of individuals and populations, and habitat degradation represented the impacts on habitats from human‐driven LULC changes in the surrounding landscape. Based on a linear mixed‐effects modeling method, we also explored the relationship between habitat degradation trends and protected area characteristics, biophysical factors, and socioeconomic factors. Habitat quality declined by 0.005 (0.6%) and habitat degradation increased by 0.002 (11%) from 1992 to 2020 globally, and similar trends occurred even in remote or restrictively managed protected areas. Habitat degradation was attributed primarily to nonirrigated cropland (62%) and urbanization (27%) in 2020. Increases in elevation, gross domestic production per capita, and human population density and decreases in agricultural suitability were associated with accelerated habitat degradation. Our results suggest that human‐induced LULC changes have expanded from already‐exploited areas into relatively undisturbed areas, and that in wealthy countries in particular, degradation is related to rapid urbanization and increasing demand for agricultural products.