Urban spatial expansion is a critical aspect of the policy of replacing counties with districts. This paper analyzes the spatio-temporal advancement of administrative division in China between 2000 and 2016, uses the Multi-Period method to examine the impact of county-to-district reform on urban spatial structure and “smart growth”. We find that the abolition of county borders leads to population migration within the city towards the newly established municipal districts, resulting in an irregular urban shape and a polycentric structure, particualrly the proactive-type reform. Further analysis shows that city-county merger promotes population polycentricity, but has no effect on employment polycentricity, leaving newly established municipal districts facing the “sleeping city”. Reformed counties expanded significantly but did not achieve substantial growth. The county-to-district reform inhibited overall urban economic growth, but cities with better population-industry match have less negative or uncertain effects.