With rapid urbanization in China, urban water resource utilization is facing up to growing challenges brought by the water shortage and pollution. Thus, it is greatly significant to strengthen the sustainability of urban water resource utilization for China's sustainable development. The indicator of grey water footprint, which provided a metric measurement for the integrated assessment of water resource scarcity in terms of water pollution, was applied in assessing the sustainability in water resource utilization of the prefecture-level cities in China in 2016 (the data of country-level city, as well as Hongkong and Macao special administrative region and Taiwan region was not included). The results showed that (1) the urban grey water footprints of prefecture-level cities were significantly different with an average of 23.40×10⁸ m³, most of which were less than 20.00×10⁸ m³. The percentages of agricultural grey water footprints accounted for more than 70% in majority cities, and those of industrial and residential grey water footprints accounted for lower than 20% and 40%, respectively. (2) The economic productivity of urban grey water ranged from 12.45-857.31 yuan/m³ with significantly regional differences. The cities under great water environmental pressure with grey water footprint load coefficients higher than 1 accounted for 33% of overall cities assessed. The average coefficient of the assessed cities was 1.16, indicating that current urban water resource utilization was unsustainable and had negative impacts on water environment. (3) This study discussed the relationships between urban water resource utilization and protection, and found that there exited synergic relationships between urban water resource exploitation rates and grey water footprint load coefficients in terms of the impacts of urbanization on the quantity and quality of urban water resource. (4) The degrees of sustainable water resource utilization decreased in the order:big city > megapolis > megacity > small and medium city. Urban development to some extent contributes to the sustainability of water resource utilization, but excessive sprawl of economy and population sizes may degrade environmental-friendly water economy, which inclines to balance the achievements of economic efficiency and environmental protection in water resource utilization. Finally, suggestions for sustainable water resource management are summarized. Taking advantage of regional geography, promoting the water resource circulation economy, and incorporating the grey water footprint accounting and management system are important ways to achieve sustainable water resource utilization under the background of rapid urbanization, contributing to nationally fulfilling the 17 Sustainable Development Goals stipulated by United Nations 2030 Agenda, in terms of urban water resource utilization.