As a rapidly ageing population becomes an increasingly serious social challenge for Chinese megacities, issues affecting older adults’ subjective well-being (SWB) attract greater concern. However, it is difficult to gain a comprehensive understanding of older adults’ SWB, since most SWB theories focus only on specific factors. Moreover, residential environmental factors are hardly considered in studies of older adults’ SWB. In this paper we therefore investigate the effects of residential environment and individual resources on the SWB of older adults in Shanghai, using the integrative theoretical framework proposed by Lindenberg. We investigate the relationships between resources (residential environment and individual resources), needs satisfaction and SWB using multiple regression analysis. Our results show that the residential environment exerts a stronger impact on SWB than individual resources. Good quality residential building, good accessibility to medical and financial facilities, higher economic status of a neighbourhood, and a lower proportion of older adults in a neighbourhood are important environmental correlates of SWB. Health appears to be the most significant individual resource; other important individual resources include household income, a high-skilled occupation, a job in the public sector and living with grandchildren. Comfort is the most important basic need for older adults.