How to realize the sustainable use of land resources is extremely important for environmental protection and sustainable development in ecologically fragile regions. Nevertheless, the logic of achieving sustainable land use (SLU) in ecologically fragile regions and the corrective mechanisms for the implementation of land use efficiency systems are not fully revealed in theory. The Yellow River Basin is an important ecological barrier in China, and it holds an important position in China’s economic and social development, as well as for ecological safety. However, the basin is also ecologically vulnerable. Therefore, investigating eight central cities in the Yellow River Basin of China and using municipal-level panel data from 2009 to 2018, this paper constructs a multidimensional index system and is dedicated to carrying out a comprehensive evaluation of SLU and the diagnosis of obstacle factors in ecologically fragile regions. The study found the following: (1) From 2009 to 2018, the SLU level in the central cities of the Yellow River Basin evolved from the “Unsustainable Level” to the “Initial Sustainable Level” and then to the “Basic Sustainable Level”. The overall development trend was positive, and the level of SLU also rose. (2) From 2009 to 2018, there was significant geographical variation in spatial disparities in SLU in the central cities of the Yellow River Basin. In 2018, the average comprehensive score of SLU showed a pattern of downstream > upstream > midstream. (3) The obstacle factors of SLU in the Yellow River Basin of these cities in 2009 were concentrated on resource and environmental sustainability, while those in 2018 were concentrated on social acceptability. (4) In terms of the transfer process of land use types in these Yellow River Basin cities, the transfer from cultivated land to other types of land use played a major role, while construction land showed a significant expansion over the past ten years.

The preference for land urbanization of local governments promotes urban sprawl, which leads to the dilemma of land finance dependence (LFD) of local governments and the negative constraints on the ecosystem of urban areas in China. However, how the urban growth boundary (UGB) policy corrects local governments’ reliance on land finance has not been discussed in depth. In July 2014, the UGB policy began to be piloted in fourteen cities in China, providing a setting to further reveal the effectiveness of the UGB policy. By constructing an evolutionary game simulation model to clarify the behavioral strategies that local governments tend to adopt in the context of the UGB policy implementation, this study proves that the effective implementation of the UGB policy, by controlling the urban land capacity, can help solve local governments’ LFD dilemma in China. The UGB policy consists of a set of technical means and policy tools that controls urban sprawl. It breaks the “unlimited land capacity” situation faced by local governments in China by limiting the urban land capacity within a given period of time, and has become a new solution to the dilemma of LFD. The implementation of the UGB policy highlighted the shortage of urban land, which has led to the increasing cost of land finance for local governments and constraints on local governments’ LFD behavior. The shortage has also forced local governments to adjust and optimize their fiscal revenue structure. The UGB policy induced ongoing evolution in the benefit distribution among relevant entities in land finance, motivated local governments and other entities to adjust their primary strategies, and made it possible to address the dilemma of LFD in China.