BACKGROUND: China has one of the highest rates of antibiotic resistance. Existing studies document high rates of antibiotic prescription by primary care providers but there is little direct evidence on clinically inappropriate use of antibiotics or the drivers of antibiotic prescription. METHODS: To assess clinically inappropriate antibiotic prescriptions among rural primary care providers, we employed unannounced standardized patients (SPs) who presented three fixed disease cases, none of which indicated antibiotics. We compared antibiotic prescriptions of the same providers in interactions with SPs and matching vignettes assessing knowledge of diagnosis and treatment to assess overprescription attributable to deficits in diagnostic knowledge, therapeutic knowledge and factors that lead providers to deviate from their knowledge of best practice. RESULTS: Overall, antibiotics were inappropriately prescribed in 221/526 (42%) SP cases. Compared with SP interactions, prescription rates were 29% lower in matching clinical vignettes (42% versus 30%, P < 0.0001). Compared with vignettes assessing diagnostic and therapeutic knowledge jointly, rates were 67% lower in vignettes with the diagnosis revealed (30% versus 10%, P < 0.0001). Antibiotic prescription in vignettes was inversely related to measures of diagnostic process quality (completion of checklists). CONCLUSIONS: Clinically inappropriate antibiotic prescription is common among primary care providers in rural China. While a large proportion of overprescription may be due to factors such as financial incentives tied to drug sales and perceived patient demand, our findings suggest that deficits in diagnostic knowledge are a major driver of unnecessary antibiotic prescriptions. Interventions to improve diagnostic capacity among providers in rural China are needed.