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The growing urbanization of oasis cities in arid and semi-arid regions of Northwest China has an adverse influence on the fragile local ecological system. Therefore, improved understanding of the coupling and coordination between urban expansion (<i>UE</i>) and ecosystem services value (<i>ESv</i>) is critical to long term sustainable development. Here, we study the urbanization trend of a typical oasis city of Northwest China (Kashgar) using Landsat TM/ETM+/OLI imagery from 1990 to 2015. Land use types are classified and the spatio-temporal features of <i>UE</i> are analyzed; <i>ESv</i> of each land use types and the ecosystem services function (<i>ESf</i>) are determined; the driving factors of <i>UE</i> and the spatio-temporal change of <i>ESv</i> are analyzed; and the coupling and coordination relationship between <i>UE</i> and <i>ESv</i> is quantitatively determined. Results show that: (1) The land use structure has changed significantly between 1990 and 2015, with construction land (40.51 km²) showing the highest growth and farmland (28.42 km²). (2) <i>UE</i> values during 2000–2005 (16.65 km²) and 2010–2015 (21.09 km²) are relatively large, and during 1990–2015, the city extended from the center to the outskirts at a dynamic growth rate of 13.17% and a comprehensive expansion index of 1.54‰. (3) The total <i>ESv</i> was reduced by CNY 35.76 million (USD ~ 5.26 million), ranked from high to low as: waste treatment (CNY 9.94 million, USD ~1.46 million), water source conservation (CNY 7.95 million, USD ~ 1.17 million), soil formation (CNY 4.60 million, USD ~ 0.68 million), biodiversity protection (CNY 3.37 million, USD ~ 0.5 million), climate regulation (CNY 3.15 million, USD ~ 0.46 million), food production (CNY 2.83 million, USD ~ 0.42 million), gas regulation (CNY 1.96 million, USD ~ 0.29 million), entertainment and leisure (CNY 1.26 million, USD ~ 0.19 million), and raw materials (CNY 0.68 million, USD ~ 0.1 million). (4) The coupling degree between <i>UE</i> and <i>ESv</i> is relatively small (<0.5), though this value has increased yearly. The coordination degree between <i>UE</i> and <i>ESv</i> is relatively low, indicating that <i>UE</i> already poses a serious danger to the ecological environment. (5) The rapid growth of the population and economy and government policies are the main driving factors of intensive <i>UE</i>. Increasing climatic factors such as precipitation, temperature, and runoff impact <i>ESv</i> in some positive ways whereas <i>UE</i> leads to a reduction of <i>ESv</i>. Our results here can help to guide long-term sustainable development of arid regions, reasonable urban planning of oasis cities, and protection of the local ecological environment.