Background: Internal migrants (IMs) are a large, vulnerable population in China and are mostly driven by national economic reform. IMs who were born before and after 1980, when the general social and economic reform began to appear in China, are considered to be two separate generations. The generational differences in mental health across IMs remain undocumented. In this study, the intergenerational disparity in IMs’ mental health, using data from a national cross-sectional study, was assessed. Methods: Cross-sectional data from the “National Internal Migrant Dynamic Monitoring Survey 2014” were used. IMs were divided into the “old” or “new” generation, based on their date of birth (before 1980 vs. from 1980 onwards). Mental health includes psychological distress, which was measured using the Kessler Screening Scale for Psychological Distress (K6), and perceived stress, which was measured with the Perceived Stress Scales (PSS-4). Two-level Generalized Linear Mixed Models were performed so as to assess the generation gap and associated factors of each group’s mental health. IM demographics, migration characteristics, and social integration indicators were controlled for when assessing the intergenerational disparity in mental health. Results: A total of 15,999 IMs from eight different cities participated in the survey. New generation migrants accounted for 61.5% (9838/15,999) of the total sample. After controlling for participants’ characteristics, new generation migrants had higher psychological distress scores (βad
= 0.084, 95% CI: (0.026,0.193) and higher perceived stress scores (βad
= 0.118, 95% CI: 0.029, 0.207) than the older generation. For both generations, factors associated with good mental health included high levels of social integration, personal autonomy, and life satisfaction, as well as self-rated good physical health. For the new generation, the mental health of urban-to-urban IMs (βad
= 0.201, 95%CI: 0.009, 0.410) for the K6, βad
= 0.241, 95% CI: 0.073, 0.409 for the PSS-4), IMs with a longer migration duration (βad
= 0.002, 95% CI: (0.000, 0.003) for the PSS-4) and IMs with a higher annual income (βad
= 0.124, 95% CI: (0.029, 0.218) for the K6) was significantly poorer than their counterparts. Conclusions: New-generation migrants’ mental health is worse compared to older IMs. An array of services for addressing these generation-specific needs may facilitate the promotion of mental health among IMs in China.