Contextualized in China’s social change of the past half-century, this paper develops the notion of dichotomous inequality to conceptualize the two aspects of China’s rural-urban divide in educational inequality—the household registration system (hukou) assigns people to a top-bottom hierarchy, and the rural-urban schooling system institutionalizes unequal resource distribution and diverse school mission. Based on this conceptualization, we formulate a Chinese version of the maximally maintained inequality (MMI) hypothesis. We capitalize on individual educational history data from the China General Social Survey (CGSS) 2008 and conduct a trajectory analysis using the generalized mixture modeling to estimate the differential effects of the two aspects of rural-urban divide on educational inequality in China. Findings indicate that (1) the sorting mechanism of the rural hukou places rural-hukou people in the very bottom of educational stratification, (2) the penalty of attending rural pre-tertiary school increases with educational stages, and (3) there is a cumulative disadvantage of rural hukou and rural school. Overall, our findings attest to the Chinese-version MMI and the behind principle of inequality reproduction.