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Background A goal of China’s 2012 National Mental Health Law is to improve access to services and decrease urban versus rural disparities in services. However, pre-reform data is needed for objective evaluation of these reforms’ effectiveness. Accordingly, this study compares the pre-reform utilization of medical services for the treatment of schizophrenia in rural and urban communities in China. Methods In a large community-based study in four provinces representing 12% of China’s population conducted from 2001 to 2005, we identified 326 individuals with schizophrenia (78 never treated). Comparing those living in urban (n = 86) versus rural (n = 240) contexts, we used adjusted Poisson regression models to assess the relationship of ‘never treated’ status with family-level factors (marital status, family income, and number of co-resident family members) and illness severity factors (age of onset, symptom severity and functional impairment). Results Despite similar impairments due to symptoms, rural patients were less likely to have received intensive mental health services (i.e., use psychiatric inpatient services), and appeared more likely to be ‘never treated’ or to only have received outpatient care. Among rural patients, only having more than four co-resident family members was independently associated with ‘never-treated’ status (RR = 0.34; 95% CI, 0.12–0.94; p = 0.039). Among urban patients, only older age of onset was independently associated with ‘never-treated’ status (RR = 1.06; 95% CI 1.02–1.10, p = 0.003). Conclusions Identifying differential drivers of service utilization in urban and rural communities is needed before implementing policies to improve the utilization and equity of services and to define metrics of program success.