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Objectives: This paper studies the institutional inequality that exists in the prevalence of diabetes and hypertension, as well as their diagnosis and medication management, between urban and rural residency status (hukou) holders in China. Methods: Exploiting the Chinese Health and Nutrition Survey, we primarily demonstrate that while a lower proportion of rural residency holders suffer from diabetes and hypertension, a larger proportion have never been diagnosed with these conditions and do not take medicine to control them. We explore the determinants of these disparities by the non-linear decomposition method. Results: Decomposition results illustrate that a large part of disparities in the prevalence of diabetes and hypertension can be explained by the differences in demographic structure and occupational socio-economic status. Regarding the ruralurban disparity in the under diagnosis and under-medication rates, the differences in demographic structure, household affluence, occupational socio-economic status and consumption patterns make the greatest contributions. Conclusions: This evidence suggests that improving the institutional economic inequality and enhancing the occupational mobility of rural residency holders are of paramount importance to mitigate any inequality in health and healthcare utilisation.