Abstract Background Most high tuberculosis (TB) burden countries are in low- and middle-income regions undergoing rapid urbanization. We aimed to assess the association between urbanization factors and TB incidence in China. Methods We evaluated urbanization at the county level in China from 2005 to 2019 using a composite index integrating population density, gross domestic product (GDP, per capita), hospital beds per 1000 population, nighttime light (NTL), and normalized difference vegetation index (NDVI). The annual incidence rate and number of TB cases were obtained from the national Tuberculosis Information Management System, maintained by the Chinese Center for Disease Control and Prevention. Fixed-effects models were used to examine the association between urbanization factors and TB incidence. A subgroup analysis was performed by dividing counties into four regions: northeast, eastern, central, and western. Results A total of 1992 counties in China were included in this study. Overall, urbanization scores were associated with reduced TB incidence (β = − 0.0114, P < 0.001), corresponding to a 1.1% reduction in TB incidence per unit score. Quadratic models presented a U-shaped relationship between urbanization and TB incidence with an inflection point at 52.94 urbanization units. For each indicator of urbanization, population density and the number of hospital beds were positively associated with TB incidence, with incidence rate ratios of 11.384 [95% confidence interval (CI): 9.337 to 13.881], and 1.015 (95% CI: 1.011 to 1.019), respectively, while GDP, NTL, and NDVI exhibited protective effects. Central China displayed an increase trend that urbanization score was linked to a 1.8% rise in TB incidence. Conclusions Urbanization-related factors, including GDP, NTL and NDVI, were inversely associated with TB incidence. Central China’s contrasting results highlighted region-specific challenges. Therefore, governments in developing countries should adopt integrated approaches that promote both economic growth and sustainable development of environment during urbanization to optimize TB control efforts. Graphical abstract