Modern cities require urban compact development to be sustainable. The evaluation of urban compact development may help create more accurate and realistic policies. The spatio-temporal dynamic evolution of urban compact development efficiency and its regional differences in China are examined in this study. This paper analysis uses 282 cities from 2005 to 2021. The unexpected output super-efficiency SBM model measures urban compact development efficiency. In this study, the urban compact development efficiency’s spatial and temporal patterns are also examined using kernel density estimation (KDE) and the Theil index (TI). The average efficiency of urban compact development in China has decreased slightly. However, compact efficiency disparities are decreasing. Eastern cities have a relatively stable compact efficiency, while central and western cities vary more. The compact efficiency polarisation has not changed fundamentally. The compact city growth model’s spatial agglomeration is poor, limiting its spatial spillover impact. Thus, compact urban development is necessary to speed up planning, facilitate inter-city production factor movement by creating a comprehensive transport network, and maximise co-location benefits with the regional integration strategy. This method will gradually reduce regional urban development disparities and push Chinese cities towards more refined and sustainable compact development.