In the past few decades, Chinese families have experienced unprecedented economic growth. In addition to growth, public policies have changed and developed, internal migration has rapidly increased, and social conditions have generally evolved. Living arrangements in particular have transformed, which likely affects the expectations and preferences of older parents to rely on their children. We use the first two waves of the China Health and Retirement Longitudinal Study (CHARLS), a nationally representative sample of older adults in China, to examine the relationship between intergenerational support and life satisfaction in both rural and urban China. In rural villages, we find that living with grandchildren is associated with a higher level of life satisfaction; this is true even in households without parents (i.e., skip-generation households). Higher life satisfaction is also attributable to receiving instrumental support (i.e., help with self-care and household tasks) from children and exchanging financial and emotional support with them. In urban neighborhoods, in contrast, living in a skip-generation household is associated with a lower level of life satisfaction, and only one type of functional support from children is beneficial for older parents’ life satisfaction—instrumental support. Our findings indicate that there is a rural–urban divide in the relationships between life satisfaction and intergenerational support in contemporary China and suggest that development has weakened historical relationships in both rural and urban areas.