India, which is rapidly urbanizing, is ranked 20th out of 152 countries in terms of the prevalence of child stunting. India performs worse than many South Asian and African nations. Due to the lack of continuous data on the level of urbanization in India, its effects on child development are little understood. This is the first study to analyze the effect of urbanization level on child stunting using nighttime lights as a continuous measure in India, following the framework of Ameye and De Weerdt (2020). However, at the highest level of urbanization, the probability of child stunting is lowest in India. It contrasts with the urbanization and child stunting experiences of East African countries, which show an increasing trend in child stunting levels at the highest and similar levels of urbanization. However, at the highest level of urbanization, wealth status, transportation issues, and the level of secondary education for mothers all improve, but the prevalence of anemic mothers rises and iron-rich food consumption deteriorates. Children from all wealth groups show a decrease in stunting except for the middle and rich wealth groups, which show an increasing trend at high levels of urbanization. This opposite trend for children of middle and rich households is explained by increasing transportation problems, money problems, the anemia level of the mother, and decreasing iron-rich food consumption. However, at the lowest level of urbanization, the probability of child stunting is highest. Overall, urbanization reduces child stunting in India. It can be boosted further by lowering the prevalence of anemia in mothers and increasing iron-rich food consumption and dietary diversity. Findings reveal that urbanization does not reduce child stunting organically in towns (5 k–100 k); therefore, the Indian government should focus on direct interventions to solve child stunting in towns. Future research must seek to understand why children from middle and rich households seem to experience worsening child stunting with urbanization.