Problems related to air pollution have become more serious over the past few years, and air particulates have attracted attention as one of the most significant air pollutants. The air quality in residential areas is closely related to human health, as urban residents spend most of their time here. Because of the unique climatic characteristics of cities in severely cold regions, their urban energy structure, underlying surface, and architectural form are different from other cities to a certain degree, which causes distinctive particulate pollution characteristics. This study establishes a urban local-scale particle diffusion model for cities in severely cold regions and investigates the particle diffusion process and vertical concentration distribution in a residential area through simulation. The simulation results show that the near-ground PM2.5 mass concentrations are significantly affected by traffic flow. The vertical distribution of PM2.5 mass concentrations in residential areas demonstrates a decreasing trend with an increase in height owing to the effect of vehicle emissions and fugitive road dust. This study systematically studies the vertical distribution of particulate matter in urban settlements in severely cold regions and provides a theoretical basis and technical support for further improving the air quality of such urban settlements.