The rapid development of China's economy and urbanization has given rise to noticeable environmental problems, among which the change of air quality has received extensive attention. The panel data of PM2.5 (particles with an aerodynamic diameter of 2.5 μm or less) in 343 prefecture-level cities in China from 1998 to 2016 were statistically analyzed to reveal the characteristics of the temporal evolution and spatial variation of China's air quality in the past two decades. The results show that: 1) the overall deterioration trend of air quality is obvious throughout the country. The variation trend of PM2.5 was divided into three phases: rapid-growth phase (1998–2007), lag phase (2006–2011) and mildly-incremental phase (2012–2016), with their average growth rates of 7.19%, −3.59% and 0.52%, respectively. 2) The spatial difference of PM2.5 values in China increased significantly with time. Since 2003, the high-value area in the east has expanded rapidly, and polarization became much more pronounced. The change rate of PM2.5 is high in the east and west and low in the middle. The change rates of most areas in the west exceed more than 80%, and in the east lie somewhere between 40% and 60%. In the midlands, the change rate is not large and some regions even show a negative growth. 3) The change rate of PM2.5 is also high in areas with higher values. However, in regions where the change rate of PM2.5 is high, the value of PM2.5 is not always high. The high change rate is mainly attributable to the low base value of PM2.5 and the cities concerned belong to sensitive areas. 4) According to the PM2.5 warning index, the number of strong, medium, weak and non-warning areas in China is 45, 85, 159 and 54, respectively.