Complex dynamic interactions exist between urbanization and sustainable urban development, and clarifying the collaborative relationship and interactive response mechanism between the two systems is key to ensuring high-quality urban development. Taking Yangtze River Delta as a typical case, dynamic coordinated and interactive response relationships between urbanization and sustainable urban development were measured using a multi-index comprehensive evaluation method, grey correlation analysis, and panel-data vector autoregressive (PVAR) model. The results indicate that: (a) a high urbanization level and significant polarization characteristics of regional central cities alongside low economic development in more peripheral cities and insufficient attraction to factors including population, capital, and technology, which widens their development gap with regional central cities; (b) a significant increasing trend in sustainable urban development, coupled with a spatiotemporal evolution trend of urbanization; (c) bidirectional Granger causal relationship between urbanization and sustainable urban development, with the PVAR model results indicating a positive interactive response relationship, which has certain path-dependent characteristics and an inertial development trend; and (d) in the long run, urbanization has a greater impact on changes in sustainable urban development than vice versa.