Prior research showed that danwei, the work unit, was very important in determining workers’ social, economic, and political lives in pre-reform urban China. In this paper, we argue that danwei continues to be an agent of social stratification in contemporary urban China. Using data from a 1999 survey we conducted in three large Chinese cities, Wuhan, Shanghai, and Xi’an, we assess the extent to which workers’ socioeconomic well-being depends on the financial conditions of their danwei. Results show that the financial situation of danweiremains one of the most important determinants of earnings and benefits. However, the explanatory power of danwei’s financial situation is much greater for earnings than for benefits.