This paper illustrates the spatial variations in urban resource and environmental efficiency (REE) amongst 285 cities in China using a Data Envelopment Analysis (DEA) model, and examines the factors that have had the greatest effect on this spatial pattern by regression models. The results gave an average urban REE of 0.6381, and an average pure technical efficiency (PTE) and scale efficiency (SE) of 0.6964 and 0.9225, respectively. The results support the existence of a U-shaped relationship between REE and income level, which means that an increase in urban GDP does not result in an equivalent increase in environmental efficiency. Economic growth affects REE in three ways: scale effects (population scale and urbanization rate); composition effects; and spatial effects. Improvements in urban resource use and environmental efficiency depend upon both technological innovation and effective governance. Policies designed to achieve these improvements should therefore be implemented at all levels of government and local enterprise.