Developing countries tend to exhibit evident urban–rural income divergence as urban areas rapidly expand into adjoining land. However, Western-centric urban theories and studies of spatial inequality have not paid sufficient attention to the connection between income divergence and urban expansion. This paper employed a panel quantile regression model to investigate this relationship in 220 prefecture-level Chinese cities in 2006–2014. To identify potential spatiotemporal effects, we conducted additional robustness checks using the spatial Durbin model and geographical and temporal weighted regression. The results show that a 1 % expansion of urban land decreases the urban–rural income gap by 0.005 % to 0.011 %. This narrowing effect is particularly prominent in the eastern and central regions and in areas that are less urbanized overall. It also varies within regions that have a more pronounced difference between the lowest and highest quantiles in northeastern China and cities with urbanization rates of >50 %. Finally, we find evidence for an inverted U-shaped relationship between urban expansion and the urban–rural income gap. Our results entail suggestions for improved urban–rural development policies aimed toward greater integration and efficiency in urban expansion.