The uneven development of urban and rural preschool education hinders the fair and high-quality advancement of preschool education in the People’s Republic of China (PRC), rooted in deep historical and institutional causes. Since 1949, propelled by the evolution of urban-rural relations, PRC’s preschool education system has transitioned from differentiated urban-rural management to initiatives aimed at integrated urban-rural development. From the perspective of the urban-rural relationship, this evolution is influenced by factors such as changes in the external environment, developmental ideologies, the public status of institutions, and the interplay of interests among stakeholders. To foster equitable development of preschool education in urban and rural areas in China, it is essential to uphold the fundamental principles of preschool education as a public welfare and universal benefit. This entails continued support for disadvantaged regions and groups, enhancing the government’s performance mechanism for preschool education in line with its fiscal responsibilities, and establishing institutional mechanisms for collaborative innovation involving all stakeholders.