Urban lakes are numerous in the world, but their role in carbon storage and emission is not well understood. This study aimed to answer the critical questions: How does algal growing season influence carbon dioxide concentration (cCO2) and exchange flux (FCO2) in eutrophic urban lakes? We investigated trophic state, seasonality of algal productivity, and their association with CO2 dynamics in four urban lakes in Central China. We found that these lightly-to moderately-eutrophic urban lakes showed a shifting pattern of CO2 source-sink dynamics. In the non-algal bloom phase, the moderately-eutrophic lakes outgassed on average of 12.18 ± 24.37 mmol m−2 d−1 CO2; but, during the algal bloom phase, the lakes sequestered an average 1.07 ± 6.22 mmol m−2 d−1 CO2. The lightly-eutrophic lakes exhibited lower CO2 emission in the algal bloom (0.60 ± 10.24 mmol m−2 d−1) compared to the non-algal bloom (3.84 ± 12.38 mmol m−2 d−1). Biological factors such as Chl-a (chlorophyll a) and AOU (apparent oxygen utilization), were found to be important factors to potentially affect the shifting pattern of lake CO2 source-sink dynamics in moderately-eutrophic lakes, explaining 48% and 34% of the CO2 variation in the non-algal and algal bloom phases, respectively. Moreover, CO2 showed positive correlations with AOU, and negative correlations with Chl-a in both phases. In the lightly-eutrophic lakes, biological factors explained a higher proportion of CO2 variations (29%) in the non-algal bloom phase, with AOU accounting for 19%. Our results indicate that algal growth and decline phases largely affect dissolved CO2 level and exchange flux by regulating in-lake respiration and photosynthesis. Based on the findings, we conclude that shallow urban lakes can act as both sources and sinks of CO2, with algal growth seasonality and trophic state playing pivotal roles in controlling their carbon dynamics.