This study explored the spatio-temporal dynamics and evolution of land use/cover changes and urban expansion in Shanghai metropolitan area, China, during the transitional economy period (1979–2009) using multi-temporal satellite images and geographic information systems (GIS). A maximum likelihood supervised classification algorithm was employed to extract information from four landsat images, with the post-classification change detection technique and GIS-based spatial analysis methods used to detect land-use and land-cover (LULC) changes. The overall Kappa indices of land use/cover change maps ranged from 0.79 to 0.89. Results indicated that urbanization has accelerated at an unprecedented scale and rate during the study period, leading to a considerable reduction in the area of farmland and green land. Findings further revealed that water bodies and bare land increased, obviously due to large-scale coastal development after 2000. The direction of urban expansion was along a north-south axis from 1979 to 2000, but after 2000 this growth changed to spread from both the existing urban area and along transport routes in all directions. Urban expansion and subsequent LULC changes in Shanghai have largely been driven by policy reform, population growth, and economic development. Rapid urban expansion through clearing of vegetation has led to a wide range of eco-environmental degradation.