China has made significant progress in enhancing maternal and child health over the past 70 years but geographic-based disparities in early childhood development remain. This study investigated trends in urban–rural gaps in early childhood development and the factors that influence them by leveraging secondary data from the China Family Panel Studies (2010–2018). We also analyzed data from two representative surveys involving direct assessments of child outcomes. In 2018, there were marked reductions in urban–rural differences in participation in center-based early education; the education level of mothers raising children under five years; and cognitive stimulation at home compared to 2010. While urban–rural disparities in children’s health status have decreased, persistent and significant urban–rural gaps in young children’s early developmental outcomes still exist. These disparities are associated with urban–rural differences in maternal education, which affect both children’s early home learning and early childhood education experiences. Suggestions to reduce such inequalities are advanced.