With the rapid development of urbanization, natural habitats in many parts of the world have been seriously damaged by urban expansion. However, urban expansion is a complex process, and the impacts of different levels of urban expansion on habitats at regional scales and their distance thresholds are still unclear. We conducted a study in Hubei Province, China to evaluate the impacts of the expansion of prefecture-level cities and county towns on the quantity, area, and quality of natural habitats and the critical threshold distances affecting habitats. The results show that, at a regional scale, habitat degradation was driven primarily by the expansion of large numbers of county towns, but the expansion of prefecture-level cities affected habitat degradation over greater distances . Specifically, the impact of county town expansion on habitat first increased and then decreased with greater distance from built-up areas, the threshold distances for habitat quantity and quality being approximately 8 km and 80 km, respectively. The impact of expanding prefecture-level cities on habitat showed a similar nonlinear change with greater distance, but the distance thresholds for habitat quantity and quality rose to approximately 40 km and 130 km, respectively. These findings not only reverse the conventional view that the expansion of large cities dominates habitat degradation, but also draws more attention to the influence of the expansion of numerous small county and towns on habitat, when measured at the regional scale. Understanding the distance threshold of particular spatial impacts can be help to inform spatial decision-making with regards to habitat conservation.