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The Yangtze River Economic Belt (YREB), an important industrial belt for food security for China, is facing the challenge of decreasing cultivated land in the process of rapid urbanization. In this case, how to improve the cultivated land use efficiency (CLUE) has become the top priority. Based on data from 108 cities of YREB from 2001 to 2019, we measured CLUE using a slack-based measure with undesirable output (SBM-Undesirable). The high-value area of CLUE shows a trend from multi-core agglomeration to two-core agglomeration, mainly concentrated in Chengdu-Chongqing urban agglomeration and the northern part of the YREB. Then the paper examines the spatial effect of urbanization on CLUE using the Spatial Error Model (SEM). The result shows that population urbanization has significantly promoted the improvement of CLUE in YREB during the sample period. With each percentage point increase in population urbanization, CLUE will increase by 2.99%. Land urbanization has a negative impact on CLUE, for each percent increase in the expansion of urban spatial scope, CLUE will decrease by 0.06%. The spatial heterogeneity analysis shows that population urbanization in the lower reaches has significantly promoted CLUE, with a coefficient of 1.053. The population urbanization level in the middle and lower reaches of the region has no obvious effect on CLUE. The coefficient of land urbanization in the downstream region is 0.35, which significantly promotes CLUE. The coefficient in the middle is −0.26, which implies the CLUE decreases by 0.26% for every one percentage point increase in land urbanization. Land urbanization in the upper has no significant impact on the CLUE. Policy implications include improving the quality of the three major urban clusters along the YREB, building an ecologic protective screen in the upper, encouraging a new agricultural management system and detailed regulations related to the cultivated land protection in YREB. [ABSTRACT FROM AUTHOR]