Compared with North America and Western Europe, Chinese cities used to feature a low extent of socioeconomic segregation. However, systematic analysis of the changes in socioeconomic segregation after the end of the provision of welfare housing is needed. Using residential-committee-level data from the fifth and sixth censuses of Shanghai, for the first time, this article systematically charts changes in socioeconomic segregation in Chinese cities over the period 2000–2010. Along with the emergence of high-status neighbourhoods and migrant neighbourhoods, Shanghai has grown more divided based on individual socioeconomic status. The extent of socioeconomic segregation in Shanghai was comparable to that of large US and European cities. While patterns of sociospatial divisions are different across central and suburban areas, the level of educational segregation becomes greater than that of hukou segregation. The crucial role of housing commodification in driving these changes highlights the importance of contextual and institutional factors in understanding the dynamics of segregation.