<p>Understanding the evolutionary trends and driving factors behind extreme hourly precipitation (EHP) in typical urban agglomerations is crucial for predicting and preventing rapid floods. We collected hourly precipitation datasets from 31 observation stations in the Central Yunnan Urban Agglomeration (CYA) spanning from 2004 to 2020. Urban and rural observations were dynamically classified based on impervious surface fraction. Linear (Granger) and nonlinear causal methods (convergent cross-mapping and Liang–Kleeman information flow) were used to identify the causal impact mechanisms of large-scale circulation, environment and urbanization on EHP. Moreover, geo-detector further reveals the spatial influence of these factors and their interactions on EHP. Our findings revealed that EHP mainly occurred in the afternoon and at midnight. Also, the frequency and intensity of EHP in the CYA significantly (<i>p</i>≤0.05) increased from 2004 to 2020, especially in urban areas. The increasing rate in urban areas was higher than that in rural areas. However, the duration of EHP/hourly total precipitation exhibited a significant/nonsignificant decreasing trend with no significant difference between urban and rural areas. Causality tests and geo-detector indicated that EHP was impacted by natural variability and urbanization. Large-scale circulation indices such as the Pacific Decadal Oscillation, El Niño-Southern Oscillation, and Indian Ocean Dipole nonlinearly influenced EHP. Additionally, urban landscape layout, vegetation, and population variation may strengthen EHP by changing environmental factors such as temperature and relative humidity. Interactions exist between these factors and influence EHP, although large-scale circulation remains the dominant influence. With global climate warming and rapid urbanization in the CYA, the frequency and intensity of EHP may further amplify in the future.</p>