Increasing air pollution, rising carbon emissions, and urban shrinkage pose significant challenges for sustainable urban development in China. Exploring the relationship between urban shrinkage and the synergy effect of pollution reduction and carbon mitigation (SPRCR) can contribute to systematically addressing the challenges of urban green development. However, few studies have analyzed all three factors within a unified analytical framework. Therefore, our study takes 288 cities at the prefecture level and above in China as the research objects and endeavors to apply the Coupling Coordination Degree (CCD), Multi-scale Geographically Weighted Regression (MGWR), and Geodetector (v2.1.0) to analyze the influence of urban shrinkage on SPRCR. From our analysis, it was demonstrated that (1) in general, urban shrinkage can inhibit an improvement in the synergistic degree of SPRCR, but the degree of inhibition is weak. (2) The relationship between urban shrinkage and this synergy shows spatial heterogeneity, with the negative impact of urban shrinkage on SPRCR mainly concentrated in the northeast region. (3) The interaction effect between urban shrinkage and construction land expansion is more significant than that between urban shrinkage and other factors, and the enhancement effect is most obvious. Given the regional differences in urban development, our study provides valuable insights for promoting sustainable urban development.