For China's rural migrants, the intention to settle in a city inherently implies two separate decisions: (1) to obtain a local urban hukou in the city and (2) to reside in the city permanently. The two decisions do not necessarily conform with each other. Despite the sheer volume of literature on China's rural–urban migration, little research has explicitly distinguished the two types of settlement intention. In addition, recent changes in the hukou policy may alter the expectations of rural migrants and hence their settlement intentions, which calls for new investigations into the current situation. This article draws on a recent survey of rural migrants in Nanjing and Suzhou to explore the settlement intentions of rural migrants. Using regression models and in-depth interviews, we confirm that settlement intentions of rural migrants tend to maximize individual and familial utilities. Though the hukou system is relaxed to allow a higher degree of flexibility, it obliges most rural migrants to consider hukou conversion and place of residence separately. While the former decision is a trade-off between rural and urban benefits related to the respective hukou status, the latter is determined by an evaluation of the livelihood and quality of life in the city. Varied conditions and expectations of rural migrants require policy makers to devise diverse and responsive welfare schemes to meet the requirements of the migrant population.