Background This study attempted to examine the discordance between family caregivers and cancer patients in their poor‐prognosis disclosure preferences in mainland China and then ascertained the associations between quality of life (QoL), perceived stress, and poor‐prognosis disclosure preferences. Methods Six hundred fifty‐one pairs of inpatients and their matched caregivers (participation rate = 92.2%) were recruited in this cross‐sectional survey. A set of paired self‐administered questionnaires were completed independently by patient–caregiver dyads. Results Fewer family caregivers than cancer patients felt that poor prognosis should be disclosed to patients (61.2% vs. 90.0%, p < 0.001). Patients' positive poor‐prognosis disclosure preference was associated with patients' better QoL (p < 0.05) and caregivers' reduced perceived stress levels (p = 0.013). However, caregivers' poor‐prognosis disclosure preference correlated only with their own physical state (p = 0.028). Moreover, the caregivers who concurred with patients in positive poor‐prognosis disclosure preference were more likely to experience a better QoL (p < 0.05) and lower perceived stress levels (p = 0.048) in the III–IV stage subgroup. Conclusions There was a significant discrepancy in poor‐prognosis disclosure preference between cancer patients and caregivers in China. The caregivers' preference of concealing poor prognosis from patients was not related to cancer patients' QoL or perceived stress. In addition, caregivers had better QoL and lower stress levels when they held the same positive poor‐prognosis disclosure preference as the patients. Copyright © 2015 John Wiley & Sons, Ltd.