China’s rapid urbanization drive, marked by extensive urban renewal projects, necessitates a meticulous examination of their transformational impact on the human settlement environment (HSE) across urban landscapes. This study investigates the impact of China’s urban renewal progress on the spatial–temporal changes in the HSE from 2009 to 2019, using data from 40 prefecture-level cities in the Yangtze River Delta. Our findings reveal an overall positive relationship between the spatio–temporal evolution of urban renewal and the HSE, suggesting that urban renewal projects have had a beneficial impact, particularly following the announcement of China’s New Urbanization policy in 2014. However, the extent of this positive impact varied among different areas, with more significant improvements observed in core cities and economically developed areas. Additionally, our study uncovered significant variations in how urban renewal influenced the HSE over time. We found that the primary influencing factor shifted from material renewal to industrial renewal. These findings offer valuable insights for improving the HSE during urban renewal processes, both in China and other regions undergoing rapid urbanization.