On the basis of the data derived from China's 2005 1% population sample survey, this paper examines regional and personal factors that shape locations chosen by China's interprovincial skilled migrants. It aims to evaluate the relative weight of employment opportunities, and amenities, and the ownership structure of economy in determining skilled migrants' destination choices, and the extent to which such place‐based factors work differently among different types of skilled individuals. The results indicate that China's skilled migration is driven mainly by interregional income differentials and that regional variations in amenities and ownership structure play a less important role in this regard. Furthermore, compared with college diploma holders, bachelor's degree holders are more responsive to wage levels and are less sensitive to the risk of unemployment, whereas those with managerial and professional occupations and those without hukou at the destinations are more sensitive to wages and employment possibilities. In addition, there is little evidence that the effects of amenities differ greatly across life‐course groups, but those holding hukou at the destinations are more attracted to places with ample government‐provided amenities. The findings suggest that at least in the first half of 2000s, China's skilled people prioritise career prospects over amenity‐related issues in their migration decisions and that institutional arrangements continue to affect interregional movements of skilled labour in China. Copyright © 2013 John Wiley & Sons, Ltd.