The urbanization process can have a profound impact on economic development, human society, natural resources, and the environment, and is closely related to sustainable development. As a developing country, China has experienced rapid urbanization that has brought forth not only economic development and income growth but also environmental degradation and an urban–rural income gap. To promote sustainable development during the urbanization process, it is necessary to assess the relative status of sustainable urbanization performance in the different regions of China and explore its driving forces. This study developed an indicator system against the background of China’s urbanization and adopted an improved entropy method to assess the social, economic, and environmental dimensions of urbanization performance in China at both the national and provincial levels. The results suggest that the national sustainable urbanization performance has improved greatly since 1990, in accordance with the increase in the urbanization rate. However, the environmental and social dimensions of urbanization performance lagged greatly behind that of the economic dimension. There was a large regional disparity among the different provinces in the 2000–2014 study period, with the highest aggregate sustainable urbanization levels concentrated in the eastern coastal region, in addition to the spatial disparity decreasing over the study period. Furthermore, the panel data regression analysis indicated that the market was the leading driving force for the different dimensions of sustainable urbanization in China, followed by intrinsic and administration forces. Finally, it is recommended that differentiated strategies should be pursued in different regions. Whereas western and central China mostly need to improve the developmental level of urban sustainability by providing more infrastructure, the eastern provinces require better coordination of the different dimensions of sustainable urbanization. This study not only may provide some policy implications for China to promote its sustainable urbanization but also may serve as a reference for other developing countries.