Childhood gender variance (GV) and its association with psychological well-being have garnered increasing interest recently but little is known about children from the community and non-Western samples. Therefore, we examined GV and its associations with psychological well-being in a Chinese community sample where study of childhood GV is extremely rare. Parents of 461 Chinese children aged 4–12 years (243 birth-assigned males) provided information on GV using the Gender Identity Questionnaire for Children (GIQC) and on psychological well-being. Children assigned female at birth (girls) were more gender-variant than children assigned male at birth (boys). In boys, higher GV correlated with lower happiness, lower self-worth, more behavior problems, and poorer peer relations. In boys, controlling for demographic covariates and adding peer relations as an independent variable, poorer peer relations also independently associated with lower happiness, lower self-worth, and more problem behaviors, and GV still associated with lower happiness and self-worth. In girls, GV minimally associated with psychological well-being but poorer peer relations associated with lower happiness, lower self-worth, and more problem behaviors. Peer relations did not moderate any effect of GV on psychological well-being. The GIQC demonstrated potential as a measurement tool outside Western contexts. Chinese boys who exhibit GV appear to face similar psychological well-being challenges as their Western counterparts. However, factors that moderate the association between GV and psychological well-being have yet to be identified in this population.