Urban expansion is one of the main factors driving terrestrial carbon storage (TCS) changes. Accurate accounting of TCS and rigorous quantification of its changes caused by historical urban expansion may help us to better predict its changes in the future. This study focuses on the carbon impacts of urbanization in China where the share of the urban population has increased from 18% in 1978 to 59% in 2017 and the growing will continue in the coming decades. Our results show that China's TCS decreased at an accelerating pace over the past three decades with an average reduction of 0.72TgC/y in 1980-1990 and 8.72TgC/y in 2000-2010, mostly due to conversion from cropland and woodland to urban land. Through simulating urban expansion under four scenarios from 2010 to 2050, we found a potential increasing trend in land conversion from woodland to urban land. This conversion trend would result in carbon storage loss at an average rate of 9.31TgC/y similar to 12.94TgC/y in 2010-2050. The increasing trend in both land conversion and carbon storage loss is especially visible in the population centers of the Yangtze River Delta and the Pearl River Delta. Considering that the indirect emission effects of urbanization, such as farmland displacement, population migration, and land degradation, may be much larger, the overall emission impact of forthcoming urban expansion in China would increase the uncertainty of the nation's carbon emissions and potentially undermine China's targets as committed in the Paris Climate Agreement.