China’s massive rural-to-urban migration in the past three decades has resulted in more than 60 million children left behind in rural villages by their migrating parents. While parental migration brings extra income via remittance, it also disrupts the family structure and strips children of parental care and supervision, thus exposing them to higher developmental risks. Using propensity score matching techniques and a nationally-representative panel dataset, this study examines the impact of parental migration on the academic development and mental health of China’s left-behind children. Findings show left-behind children faring no worse than the rural native children in terms of school grade and cognitive ability but reporting significantly lower subjective well-being and higher psychological distress. Treatment effect variation by gender and by parental migration mode reveals left-behind boys and children left behind by mothers and by both parents to be more vulnerable to the harmful effects of parental migration. The results suggest that while the increased household income via remittance may buffer the negative consequences of parental separation on left-behind children’s academic development, it does not alleviate the adverse effects in the mental health domain. Matched data using the propensity score suggest that left-behind children’s mental health is related to the strength of parental bonding and the level of tension within the family. These findings call for policy intervention to address left-behind children’s mental health.