► We examine the relative concerns of rural-to-urban migrants in China using a novel dataset. ► We find that the subjective well-being of migrants depends on several reference groups. ► Relative concerns of the rural-to-urban migrants are negatively affected by the income of other migrants and workers of home regions, i.e., “status effect”. ► We identify a positive relative income effect vis-à-vis urban workers, i.e., “signal effect”. ► Results show substantial heterogeneity among migrants. As their environment changes, migrants constitute an interesting group to study the effect of relative income on subjective well-being. This paper focuses on the huge population of rural-to-urban migrants in China. Using a novel dataset, we find that the well-being of migrants depends on several reference groups: it is negatively affected by the income of other migrants and workers of home regions; in contrast, we identify a positive, ‘signal’ effect vis-à-vis urban workers: larger urban incomes indicate higher income prospects for the migrants. These effects are particularly strong for migrants who wish to settle permanently, decline with years since migrations and change with other characteristics including work conditions and community ties.