This study investigates the role of sense of place (SoP) in the relationship between the neighbourhood environment (NE) and subjective well‐being (SWB), focusing on Chinese migrants who face spatial and cultural displacement. Beyond previous research, we further consider the influence of residential length. Surveying 716 migrants in Wuhan in 2018, we explore the dynamic place mechanisms underlying the association between the NE and SWB. Our findings reveal that the physical and social aspects of the NE, particularly walkability and social integration, significantly impact migrants' SWB. Moreover, SoP mediates the relationship between the NE and SWB, highlighting the social production function of people and places in communities. Long‐term residence does not directly affect migrants' SWB, yet just indirectly influence SWB through SoP. This underscores the ongoing pertinence and significance of SoP, connecting residential stability to positive social implications. This study concludes that the place mechanism underlying the association between the NE and migrants' SWB operates both through migrants' emotional connections to a specific place (SoP) and the reinforcement of place experience resulting from a longer duration of residence. To establish inclusive communities, we propose planning and governance measures that enhance space quality, empower neighbourhoods to foster SoP, strengthen residential stability, and improve migrants' SWB.