In response to the growing number of older people living in cities, the World Health Organization (WHO) introduced the concept of “Age-Friendly Cities” (AFC) to guide the way in designing physical and social environments to encourage active ageing. Limited research has studied the effects of neighbourhood age-friendliness on elderly health outcomes. Using the example of a highly urbanized city in Asia, this study examined the effects of perceived age-friendliness of neighbourhood environments on self-rated health (SRH) among community-dwelling older Chinese. A multi-stage sampling method was used to collect views of community-dwelling older people from two local districts of Hong Kong. A structured questionnaire covering the WHO’s eight AFC domains was developed to collect information on the perceived neighbourhood environments, SRH and individual characteristics. Age-friendliness of neighbourhood was assessed by mean scores of AFC domains, which was used to predict SRH with adjustment for individual and objective neighbourhood characteristics. Furthermore, 719 respondents aged ≥60 years completed the questionnaire, of which 44.5% reported good SRH. Independent of individual and objective neighbourhood characteristics, multiple logistics regressions showed that higher satisfaction on outdoor spaces and buildings, transportation, housing, social participation, and respect and social inclusion was significantly associated with increased odds of reporting good SRH by more than 20% (p < 0.05). Individuals aged 70–79 years, being female, lower education and residents of public or subsidized housing were less likely to report good SRH, after controlling for individual and neighbourhood characteristics. In addition to age, gender, education and housing type, AFC environments have important contributive influence on SRH, after controlling for individual and objective neighbourhood characteristics.