Bangladesh is one of the emerging economies in the Global South, and rapid urbanization is the driving force behind its economic development. Urban growth and development are closely associated with land use/land cover changes in any area, which sometimes negatively affect the livelihood and wellbeing of local people. We investigated the impacts of urban land use changes on the local people of northwestern Bangladesh using Nilphamari Sadar as a case study site. In order to identify land use patterns and variations in land cover, a 10-year period of land use/land cover changes from 2000 to 2020 was monitored using satellite imagery and the supervised classification method. Primary data were collected through household surveys and focus group discussions. Our analysis suggests that land use has changed over the past 20 years in the study area. As a result, the land area under settlements has substantially increased from 19 square kilometers in 2000 to 48 square kilometers in 2020. Waterbodies were 24 square kilometers in 2010, dropping to 4 square kilometers in 2020, whereas croplands decreased to 218 square kilometers in 2020 from 259 square kilometers in 2000. These changes have proportionately and adversely affected the lives and livelihoods of the local people by altering their longstanding traditional livelihood options, limiting their access to common resources, failing to adapt to new environmental arrangements and economic structures, and creating new forms of vulnerability. We suggest that urban planning processes should consider local people’s interests with the entitlement of local and marginalized people to the benefits generated by urbanization.