The urban heat island (UHI) effect resulting from rapid urbanization is attracting increasing attention among the global scientific community. This research analyzed the relationship between urban expansion and the UHI effect utilizing an integrated approach, including urban land interpretation and retrieving land surface temperature based on remote sensing, and spatial overlay analysis for revealing the relationship for different time periods between 1984 and 2014 in Shanghai, China. The results show that (1) the spatiotemporal changes in UHI are consistent with the expansion of urban land, and rapid urban expansion leads to an expansion of the UHI, in particular along roadways. (2) The mode of urban expansion is an important factor influencing the UHI effect. Urban sprawl (urban expansion in the edge-expansion way) is a form of typical expansion that leads to the rapid increase in the UHI. When the urban compactness ratio is less than 0.15, a compact design can effectively control the expansion rate of the UHI and mitigate its range of influence and intensity. However, when the urban compactness ratio is greater than 0.15, the urban design has a marked influence on the UHI ratio index: a more compact form produces a stronger UHI effect. So, finding an equilibrium between urban compactness ratio and urban expansion rate is good for effective urban management and planning.