In order to explore the resource optimization allocation method for the rapid development of urbanization in Urumqi and achieve sustainable development of the city from the perspective of "ecological-production-living spaces", on remote sensing image data of land cover in Urumqi from 1980 to 2020 (every 10 years, a total of 5 periods) was based. Methods such as land use transfer matrix, ecological environment quality index, land use transformation ecological contribution rate, and InVEST model were used to estimate habitat quality, Quantitative analysis was conducted on the transformation of land use functions and ecological environmental effects in Urumqi City. The results show as follows. The ecological space in Urumqi continues to be compressed, the living space continues to increase, while the production space undergoes an inverted "V" shaped trend of first increasing and then decreasing. The transformation of land use function in Urumqi mainly manifests in the mutual transformation between grassland ecological space and production and living space. The ecological environment quality index in Urumqi continues to decline, and the transformation of grasslands into other ecological spaces is the main reason for the deterioration of the ecological environment quality in Urumqi. The level of habitat quality in Urumqi continues to decline, with the conversion of grassland and water ecological spaces into other ecological spaces being the main reason for the decline in habitat quality. It can be seen that land use transformation will have a huge impact on the quality of the ecological environment. The research results can provide guarantees for the sustainable improvement of the ecology in Urumqi City, and also provide reference for coordinating the sustainable use of land resources and protecting the ecological environment in Xinjiang.