Terrestrial ecosystem carbon storage plays an important role in mitigating global warming. Understanding the characteristics and drivers of changes in carbon storage can provide a scientific basis for urban planning and management. The objective of this study was to reveal the ways in which urbanization influences the spatial and temporal variations in carbon storage. In this study, we investigated the changes in carbon storage from 1990–2000, 2000–2010, and 2010–2018 in the Su-Xi-Chang region, which is a typical fast-growing urban agglomeration in China, based on the InVEST (Integrated Valuation of Ecosystem Services and Tradeoffs) model. Moreover, we analyzed the impacts of urbanization-induced land-use changes on carbon storage. The results showed that in terms of space and time, the greatest loss of carbon storage occurred in developing urban areas and during the rapidly urbanizing stage. Our study revealed that the reduction in cultivated land was the greatest contributor to carbon stock losses. In addition, we found that some types of land use conversion can enhance carbon storage. Based on the results, some suggestions are proposed aimed at promoting urban sustainable development. This study also provides insights into enhancing urban sustainability for other urban agglomerations throughout the world.