In this article we examine mathematics achievement by students in the rural and urban areas of Yunnan Province in China. Using a sample of students in 162 primary schools, we explore the direct and indirect roles that are played by students’ school location, family background, and teacher qualification. Our research findings include both “good news” and “bad news.” One finding which ought to be considered as “good news” is that, consistent with previous research in China about the inability of parents directly transmit advantages to their children, our survey data reveal no effect of family resources on fourth graders’ mathematics achievement. The “bad news” is rural students are significantly behind urban children. In addition, a school level of teacher training has a large effect on student’s knowledge of mathematics, we discover, even after controlling for their location and family background. Our research has policy implications for the improvement of rural schooling in China, and it also illuminates the mediating role of school quality in China’s social stratification.