The increasing rate of the observed daily minimum temperature Tmin has been much higher than that of the observed daily maximum temperature Tmax during the past six decades across China. In this study, the local urbanization impact on these observed asymmetric warming rates was investigated. The latest released land-cover data with a 30-m spatial resolution and annual temporal resolution from 1985 to 2017 were used to quantify the urbanization ratios around weather stations. Although urbanized areas occupied only 2.25% of the landmass in China, the percentage of stations with an urbanization ratio over 20% increased from 22.1% to 68.2% during the period 1985–2017. Significant asymmetric warming rates at urban stations were identified, which were approximately 3 times larger compared to the average asymmetry observed at all 2454 stations in China. However, this asymmetry disappeared at rural stations. These differences are mainly due to the rapid local urbanization around most meteorological stations in China since 1985, which affected the spatial representation of observations and led to the observed asymmetry warming rates. The results reported here indicate that the observed asymmetric warming rate over China from 1985 to 2017 is an observational bias due to local urbanization around most stations rather than large-scale climate change. The results also explain the phenomenon that the observed warming rate of Tmin remains higher than that of Tmax after 1990 when the surface solar radiation stops decreasing in China.