<p>Research on rural-urban differences in subjective wellbeing (SWB) often relies on single-item life satisfaction measures and broad rural-urban classifications, offering limited insight into how different wellbeing dimensions vary across settlement and institutional contexts. This study examines SWB across five settlement types and five welfare state regimes using Round 6 data from the European Social Survey (ESS) for 23 European countries (<i>N</i> ≈ 30,000). Using the Mazziotta-Pareto Index, we construct composite indices for life satisfaction and five dimensions of SWB: evaluative wellbeing, affective wellbeing, social wellbeing, basic psychological needs satisfaction, and mental resources. We find that apparent rural advantages in life satisfaction and affective wellbeing disappear once demographic and socioeconomic characteristics are taken into account. By contrast, sizeable and robust advantages for village and countryside residents persist for social wellbeing and mental resources, suggesting that these dimensions are more strongly associated with smaller settlement types. These settlement-related patterns also vary across welfare state regimes: wellbeing levels are high and relatively even across settlement types in Nordic countries, while Eastern European cities display pronounced disadvantages in evaluative wellbeing. Country-level analyses reveal further heterogeneity in which settlement type scores highest across dimensions. Overall, the results show that wellbeing advantages associated with living in villages and the countryside are multidimensional, dimension-specific, and institutionally conditioned, and that a focus on single-item measures may obscure important settlement-related patterns.</p>