Urban sprawl is the main characteristic of rapid urbanization in China. Based on six satellite images of Fuzhou City in 1989, 1994, 1999, 2003, 2006 and 2009 respectively, this paper uses the gray system theory to study the urban sprawl process and the evolution trend of Fuzhou City with the aid of GIS technology. Particularly, the compactness index, urbanization speed index, urbanization intensity index, urban land and population growth elasticity coefficient - are employed to analyze the characteristics of urban sprawl. Additionally, the effect of urban sprawl on land use change was investigated. The results show that the increase of population and economic growth are the main driving forces to urban sprawl in Fuzhou City and the urban sprawl process destroyed lots of land ecosystems. Based on our prediction using the GM (1,1) model, the built-up area of Fuzhou in 2015 and 2020 would be 264.03 km2 and 339.02 km2 respectively. These above findings are of great importance to policy makers for a sustainable urban planning and land resources management system in Fuzhou City.