China’s rural industrialization has been a major driver for its rapid economic growth during the recent decades, but its myriad environmental risks are yet to be fully understood. Based on a comprehensive national land-use data set, our study shows that the area of China’s rural industrial land (RIL) quadrupled during 1990–2015, reaching 39338 km² in 2015, comparable to urbanization in magnitude but with a much greater degree of landscape fragmentation which implies stronger ecological and environmental impacts. About 91% of the protected areas in the central China were within 50 km from rural industrial land, thus exposed to industrial disturbances. Accelerated rural industrial land expansion, particularly in regions under high geo-hazard risks, led to dramatically increased environmental risks, threatening the safety and health of both rural industrial workers and residents. Moreover, negative effects from rural industrial land expansion could partially offset the crop production growth in recent decades. The underprivileged rural population in the west bears a disproportionally large share of the increased environmental risks. China urgently needs to design and implement sustainable policies to restrict and reshape its rural industrialization. This study aims to inspire policy makers and researchers to rethink the current model of industrial expansion and improve rural industrial land planning, which is important for achieving the sustainable development goals of China.