||It is well documented that socioeconomic status (SES) is positively associated with health, but how this relationship varies with urbanization level is less clear. This study reveals how SES gradients are altered by rapid urbanization in contemporary China. Using panel data from the China Health and Nutrition Survey in 1997, 2000, 2004, 2006, 2009 and 2011, this paper compares two competing theories of the confounding effects of urbanization on the SES-health relationship, and explores the mechanisms through which urbanization exerts its effects. Empirical evidence from logistic regression and random effects estimation suggests three main conclusions. First, the positive link between income and health is moderated by urbanization. The protective role of education on maintaining health becomes more prominent in more urbanized areas. Second, lifestyle is the pathway through which urbanization affects health. A high-fat diet and decreased physical activity influence the SES-health relationship and increase health risks in more urbanized areas. Third, vulnerability to the effects of urbanization shows a gender difference. The influence of urbanization on the SES-health relationship is more persistent among females than males. The results highlight the importance of considering the role of structural factors in shaping the SES gradient in health. The widespread health penalty of urbanization suggests an urgent need for gender- and region-specific health promotion programs in China.