Based on a sample of migrant children in Kunming City, Yunnan Province, this study investigated the effects and mechanisms of the neighborhood environment on the physical and mental health of migrant children. This study found that the effects of community landscape and neighborhood cohesion on the physical and mental health of migrant children are significant. In contrast, the impact of the built environment such as community roads and traffic safety was not significant. Path analysis showed that the sense of inclusion and exclusion had a mediating effect on the association between the neighborhood environment and children's health. A high-quality neighborhood environment could enhance the sense of inclusion and reduce the sense of exclusion, thereby promoting the physical and mental health of migrant children. This study revealed the underlying mechanisms in the environment-health link, and provided practical implications for relevant policymakers and practitioners.