Reducing the gap in health outcomes between rural and urban areas in China has been a focus of the central government’s health reform efforts since 2002. Drawing on national survey data from 2003 and 2008, this paper analyzes changes in the rural-urban gap for patients with chronic diseases. Overall, there were substantial improvements at the national level in insurance coverage and the use of hospital services for both urban and rural residents with chronic diseases. There was also an overall reduction in the rural-urban gap in the use of inpatient services. But the gains were uneven. For example, although rural Chinese with chronic disease could more easily start inpatient treatment in 2008 than they could in 2003, because of the higher hospital copayments required under insurance coverage for rural citizens, they were more than twice as likely to drop out of treatment as were Chinese in urban areas. The strongest evidence of the narrowing of the rural-urban gap came from central China, while the evidence is mixed for western and eastern China. Our analysis suggests that different approaches will be required to narrow the rural-urban health service gap in different regions of China