Objectives: The allocation of care resources in elderly care institutions is directly linked to the well-being, quality of life, and sustainable development of public health for the elderly. However, a disparity in elderly care resources between urban and rural areas exists. Therefore, this study aims to explore resource allocation efficiency in China’s urban and rural institutional elderly care. Study Design: Employing a mixed-methods approach, the research integrates quantitative analysis with spatial-temporal assessments to investigate spatial-temporal evolution patterns of resource allocation efficiency. Methods: A Projection Pursuit Evaluation Model (PPM) utilizing an Accelerated Genetic Algorithm is applied to measure the input and output of urban and rural elderly care institutions. Data Envelopment Analysis (DEA) is used to visualize the static and dynamic efficiency. Spatial analysis techniques uncover the spatial evolution of resources. Results: Significant disparities in resource allocation between urban and rural areas were identified, with rural areas facing declining numbers of elderly care institutions despite a more severe aging situation. The efficiency analysis revealed room for improvement in both urban and rural settings, emphasizing the need for technical advancement and better scale management. Conclusions: Addressing the challenges of elderly care in China requires policy reform, enhanced government support, and stimulation of private investment, particularly in rural areas. A shift toward quality-focused elderly care and strategic investments is crucial for equitable and efficient service provision across China.