Sustainability of China’s numerous cities are threatened by both quantity- and quality-induced water scarcity, which can be measured by the water footprint from a consumption (WFcons) or production (WFprod) perspective. Although WFcons was widely assessed, the changes in WFprod of China’s cities were still unclear. Taking 31 major cities as examples, this study revealed the dynamics of urban WFprod in China from 2011 to 2016. First, the spatiotemporal patterns of WFprod and water deficit were evaluated and then the main reasons for the WFprod dynamics and its implications for urban sustainability were explored. A large-scale decrease in urban WFprod in China was found, with the average WFprod decreasing from 13.8 billion m³ to 10.3 billion m³ and the per capita WFprod decreasing from 1614.8 m³/person to 1184.0 m³/person (i.e., falling by more than a quarter in just six years). Such shrinkage was particularly evident in drylands, eliminating the water deficit in Xi’an and Xining. The reduction in grey WFprod caused by implementing water pollution prevention policies and other relevant measures played the most important role in the savings. In the future, the implementation of updated pollution discharge standards is projected to allow more cities to escape water deficits; however, the rapid growth of the domestic and ecological blue WFprod caused by urbanization and urban greening would destabilize this prospect. Thus, attention should be given to both water pollution prevention and domestic and ecological blue WFprod restriction to further alleviate urban water scarcity in China.