China's extensive and growing carbon dioxide (CO₂) emissions are linked to rapid economic development and advancing urbanization, posing serious concerns in the context of climate change. Decomposition analysis has been widely performed to identify the drivers of China's CO₂ emissions. However, to date, no researchers have examined the drivers of the change in CO₂ emissions under the progress of urbanization across all of its provinces. Using provincial statistical data and six key factors influencing CO₂ emissions (carbon intensity, energy intensity, resident consumption, consumption inhibition, population urbanization, and population size), we applied the logarithmic mean Divisia index decomposition method to examine how urbanization affect CO₂ emission changes across 30 provinces during 1990–2016. We elucidated that while urbanization's effects on CO₂ emissions increased in China as a whole during this period, they were regionally differentiated. The energy intensity effect was the main driver of reduced CO₂ emissions, with carbon intensity exerting weaker effects in the 30 provinces, differentiated by their energy structures. The resident consumption effect, strongly linked to advancing urbanization, was the primary driver of increased CO₂ emissions in all the provinces. While the consumption inhibition and population urbanization effects were positive at the national level, they were negative in highly urbanized provinces and in highly industrial provinces. These findings highlight the need to promote environmentally friendly consumption and to design regionally differentiated policies and optimized energy structures tailored to particular urbanization contexts. Moreover, they can provide valuable inputs for other developing countries undergoing continuous urbanization, contributing to efforts to balance economic development and environmental sustainability.