China's new urbanization (NU) plan prioritizes reducing urban-rural inequality (URI) and promoting urban-rural integration. Although previous studies have examined the impact of NU on URI, the heterogeneity of this impact has not been extensively considered. This paper establishes an analytical framework to explore the impacts of NU on URI while accounting for spatial and response heterogeneities. By using data collected from 286 Chinese cities, we assessed the performances of NU first, and measure the degree of URI second, and accordingly estimated the heterogenous impacts of NU on URI using geographically weighted quantile regression (GWQR) model. We found that URI and NU are spatially uneven and both show skewed distributions. The benchmark regression model shows that NU tends to reduce URI, while the GWQR model confirms that the impacts of NU on URI are spatially heterogeneous and change with the degree of inequality. Specifically, the narrowing impacts of NU on URI are more profound in western China than in eastern China and such impacts become stronger as URI increases. These findings suggest that the implementation of NU should be tailored to the local geographical and socioeconomic conditions.