<p>China has experienced a large-scale internal migration process in recent decades. In this context, a notable trend has emerged: local residents’ negative attitudes toward internal migrants have significantly declined over time. To understand this shift, this study investigates how the influx of migrants shapes local socioeconomic dynamics, with a particular focus on household wealth trajectories and their consequences for intergroup relations. Drawing on empirical analysis of migration patterns and longitudinal household data, we demonstrate that migrant-induced economic spillovers, mediated through changes in housing prices, substantially enhance wealth accumulation among local hukou residents. This material gain, in turn, weakens anti-migrant sentiment through behavioral mechanisms rooted in shared economic interests. By unpacking the interplay between migration, economic outcomes, and social attitudes within China’s institutional setting, the study reveals how migration can function not only as an engine of economic growth but also as a catalyst for social integration. While focused on China’s internal migration, our findings reveal a generalizable mechanism: when host populations benefit economically from migrant inflows, intergroup tensions ease. Because attitudes toward migrants, whether domestic or international, arise from group interactions shaped by material interests, this insight may inform research on immigration and social cohesion in contexts like the U.S. and Europe.</p>