Environmental degradation caused by rapid urbanization is a pressing global issue. However, little is known about how urban changes operate and affect environments across multiple scales. Focusing on China, we found urbanization was indeed massive from 2000 to 2015, but it was also very uneven, exhibiting high internal city dynamics. Urban areas in China as a whole became less green, warmer, and had exacerbated PM_2.5 pollution. However, environmental impacts differed in newly developed versus older areas of cities. Adverse impacts were prominent in newly urbanized areas, while old urban areas generally showed improved environmental quality. In addition, regional environmental issues are emerging as cities expand, connect and interact to form urban megaregions. To turn urbanization into an opportunity for, rather than an obstacle to, sustainable development, we must move beyond documenting urban expansion to understand the environmental consequences of both internal city dynamics and the formation of urban megaregions.