Liaoning Province has a relatively high level of urbanization due to its early industrial development. To accelerate the implementation of the new urbanization strategy and promote sustainable development while assessing the dynamic development of urbanization, satellite-based nighttime light data has been widely used to observe urban spatial patterns at various scales. Using NPP/VIIRS nighttime light data as the data source from 2012 to 2020, the effectiveness of nighttime light data in reflecting the dynamic development of urbanization was verified by first employing correlation analysis and factor and interaction detection algorithms in geographic detectors. Based on this, coefficient of variation, trend analysis, and Hurst index analysis were used to analyze the distribution characteristics and development trends of urbanization in Liaoning Province at both the provincial and regional levels. The results show that nighttime light remote sensing data is an effective source of data for evaluating urbanization features. At the provincial level, urban areas have continuously expanded over the past decade, but approximately half of the areas within urbanized areas lack development vitality, leading to a development bottleneck of quantity over quality. Meanwhile, at the regional level, urbanization exhibits significant differences, with the Shenyang Metropolitan Area and the Liaoning Coastal Economic Zone showing significantly higher levels of urbanization than other areas. The Liaodong Green Economic Zone has been hindered by ecological protection restrictions, resulting in lagging development, although the predicted results show a positive trend in urbanization development.