This study analyzes land use dynamics, land fragmentation, variation of ecosystem service value (ESV), and the underlying driving forces in the context of rapid urbanization in Taizhou city, China. An integrated approach utilizing geographic information system and remote sensing was used to analyze land use/land cover change, spatiotemporal patterns of land fragmentation and variation of ESV over the period of 1995–2010. The results show that the areal extent of built-up land increased by 3.72 times, whereas loss of the cropland, forest, and fallow land accounted for 18.52, 34.80, and 28.94 % of the new built-up land, respectively. As observed, in-filling of the major traffic road networks and axis-based expansion of built-up land occurred. Outward expansion of the built-up land, in particular, indicated that human encroachment into surrounding natural and semi-natural ecosystems leading to decreased total ecosystem service functions of the study area. As a whole, significant change in key landscape, especially a net decrease in forest, and remarkable socioeconomic development should be responsible for an overall decline in 36.29 % of total ESV during the recently rapid urbanization process. Therefore, sustainable development policies should address the decline of ESV.