ObjectivesThis study investigated the association between urbanisation and self-rated health of older adults in China, particularly how different dimensions, rate and level of urbanisation are related to older people’s health. Additionally, it examined the moderating effect of education on the association between each of the four dimensions of urbanisation and older people’s health.DesignThe study uses a cross-sectional survey design.ParticipantsThis study analysed 236 030 individuals (aged 60–79 years) nested within 267 prefecture-level cities from 2005 China’s 1% population sample survey.Outcome measuresSelf-rated health was the outcome variable. Four groups of predictors assessed prefectures’ level and rate of urbanisation: land-use conversion, economic growth, population concentration and health services. Multilevel logistic regression was used to examine the association between self-rated health and the level and rate of urbanisation, after adjusting for individual-level covariates. Multiplicative interactions explored variations by education.ResultsThe odd of reporting fair or poor health was negatively associated with the level and rate of population concentration (OR 0.93,95%CI 0.87 to 0.99 and 0.74,95%CI 0.59 to 0.93, respectively) and positively associated with the level of health services (OR 1.12, 95% CI 1.06 to 1.19). Land-use conversion, economic growth and health service improvements (the forms of rate of urbanisation) were not significantly associated with self-rated health. Education had a moderating effect on the association between urbanisation and self-rated health.ConclusionsOlder people living in more densely populated areas and areas undergoing rapid population concentration were less likely to report fair or poor health. This result supports healthy migration and ‘salmon bias’ hypotheses. No urban health penalty was observed for the older adults in China; therefore, the following pathways linking urbanisation to health are unclear: lifestyle changes, environmental pollution and cultivated land reduction.