This study calculates green total factor productivity (GTFP) in China by using super-efficiency SBM (slacks-based measure) and explores the relationship between China’s urbanization, agricultural labor transfer (ALT), and GTFP. Firstly, the results show a significant improvement in the GTFP of China’s counties over the last two decades, there is a positive correlation between GTFP and geographical location. Secondly, urbanization has a significant role in promoting the development of GTFP. Urbanization can promote GTFP by accelerating the ALT. Under the higher level of social welfare, urbanization, and the ALT have a stronger role in promoting GTFP. Thirdly, urbanization and ALT have a lag effect on GTFP, and they play a promoting effect on GTFP in the long run. Heterogeneity analysis shows that urbanization and ALT can better promote the improvement of GTFP in areas with a developed economy and low information technology levels.