As urbanization in China progresses, urban spatial development is transitioning from rapid expansion to more intensive and compact growth. This study examined the role of physical geography and environmental factors in shaping the urban spatial development in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). Based on the current natural conditions, we selected evaluation indices from topography, hydrogeology, climatic conditions, and natural disasters. These indices were used to create a carrying capacity and suitability evaluation system for development land under natural constraints. Finally, the spatial development potential of the city was finalized by taking into account the current state of the built-up area of the city. Meanwhile, we employed the Optimal Parameters-based Geographical Detector and assessed the impact of 14 natural factors on the spatial development of urban built-up areas. In 2020, the GBA had 52,168.77 km2 of land suitable for construction, of which 34,241.13 km2 was highly suitable (61.29%) and 17,927.64 km2 was moderately suitable (32.09%). At the Bay Area level, 90.15% of the development potential remains untapped; at the city level, Zhaoqing City has the highest potential at 99.56%, while Macao has the lowest at 26.83%. Key factors influencing urban development include silty sand content, annual average relative humidity, and cumulative temperature above 0 °C, with varying impacts across different urban scales. At the Bay Area level, the silty sand content, annual average relative humidity, and cumulative temperature above 0 °C are the main influencing factors on the spatial development of urban built-up areas; at the city level, the main factors are annual average relative humidity and cumulative active temperature above 0 °C. This study reveals the important influence of natural environmental factors on urban spatial development, which is conducive to promoting sustainable development of land resources in GBA.