This study examines the association between productive activity patterns and functional health trajectories of Chinese older adults and whether this association varies by urban/rural residence. Using three waves of the China Health and Retirement Longitudinal Study from a sample of 7,503 older adults, we first performed latent class analysis (LCA) to identify productive activity patterns based on four activities (work, caregiving, informal help, and formal volunteering). Next, multilevel regression analyses were conducted to assess the association between the identified productive activity patterns and functional health trajectories among older adults. Four productive activity patterns are identified from LCA: nonengagers, working-caregivers, workers, and helpers. We find that participation in productive activities is associated with slower functional health decline. The moderation effects of urban/rural differences are prominent across identified groups. Our findings highlight the importance of the urban/rural context in understanding productive aging and its health consequences among Chinese older adults.