This paper constructs a comprehensive evaluation system of human settlements focusing on housing conditions, urban natural environments, social economy, and public infrastructure. Principal Component Analysis and Cluster Analysis are used to analyze and rank the 2003–2013 human settlements index and create five clusters for 35 major cities in China (including municipalities, provincial capitals, and Prefecture-level cities). On the basis of four years of a spatial analysis of the human settlements index, we find that living conditions of 35 Chinese cities have significantly improved; severe air pollution persists in China, with large differences between the north and the south; weak correlation between urban human settlements and the growth rate of economic development; and the infrastructure of China's mega cities is overloaded. The results confirm and quantify growing geographic disparities and deep structural urban challenges that are associated with rapid economic growth and social change, leaving many cities in China to struggle with worsening pollution, excessive demand on existing infrastructures, and housing prices that rise faster than disposable incomes. [ABSTRACT FROM AUTHOR]