The aim is to Urban birth and upbringing show consistent associations with psychotic illness but the key urban exposures remain unknown. Associations with psychotic-like experiences (PEs) are inconsistent. These could be confounded by common mental disorders associated with PEs. Furthermore, associations between PEs and urban exposures may not extrapolate to psychotic disorders such as schizophrenia. Annual cross-sectional surveys among first year Chinese undergraduates 2014–2019 (n = 47,004). Self-reported, hierarchical categorisation of psychosis: from psychoticism, paranoid ideation, schizotypal symptoms, nuclear syndrome using SCL-90-R, to clinical diagnosis of schizophrenia. Associations with urbanicity were found only after adjustments for depression. Child maltreatment was associated with both psychosis and depression. Urbanicity measured across the total sample did not show any associations with demography, family history of psychosis, or child maltreatment. Sensitivity analysis additionally adjusting for dissociative symptoms and PTSD showed the same pattern of findings. Urban birth and urban living showed a hierarchical pattern of increasing associations from paranoid ideation to schizotypal disorder to schizophrenia, confirming that associations for psychotic experiences could be extrapolated to schizophrenia, but only after adjusting for confounding from depression, dissociative symptoms and PTSD. Several etiological factors were the same for psychosis and depression. Future studies of PEs should adjust for confounding from common mental disorders and dissociative symptoms.