In the last four decades, the problem of income inequality has gradually become one of the most serious social problems in China at both the regional and individual levels. Recently, the central government announced that the main social contradiction is that between people's growing need for a better life and unbalanced and insufficient economic development. In this study, we analyse the effects of income distribution on individuals' health using a series of indicators of income distribution and different measures of individuals' health status. By utilizing data from the China Health and Nutrition Survey (CHNS) from 1989 to 2015, our empirical findings show that self-reported health (SRH), activities of daily living (ADLs), and diabetes mellitus appear to be negatively related to the income share of rich people when average income is equalized among counties, which indicates that individuals' health will deteriorate as the income share of rich people increases. In addition, our results show that there is an inverted U-shaped relationship between income inequality, as measured by the county-level Gini coefficient, and individuals' health status. We also find that income inequality affects health through the accessibility of healthcare facilities and public infrastructures and through hazardous health behaviours such as smoking and alcohol use. These findings suggest that reducing income inequality could be an important means of improving the overall health of China's population.