Highway construction is a major driver of landscape transformation, yet its integrated effects on ecological functions in forested regions under strong ecological governance remain poorly quantified. This study examines spatiotemporal changes in land use, landscape patterns, ecosystem service value (ESV), and habitat connectivity within 1–5 km buffer zones along three highways in Zhejiang, China, from 2000 to 2023. Results indicate that highway-induced fragmentation was land-use-specific: cropland and construction land became more fragmented, while forests maintained high spatial cohesion due to protective policies. ESV per hectare increased over time and with distance from highways, driven by forest expansion and economic revaluation. In contrast, habitat connectivity for reptiles, amphibians, mammals, and birds declined, revealing a decoupling between ESV enhancement and connectivity conservation. These findings underscore the context-dependent impacts of highways and highlight the need for integrated management strategies that preserve forest integrity to balance ecological functions in rapidly developing regions.