This short-term longitudinal study aims to expand our understanding of the role of peer victimization, student-level perceived school climate, covitality, and mental health difficulties among 897 Chinese elementary school students (3rd to 6th graders, M[subscript age] = 9.91 years, SD = 1.16 years, 57.44% boys). Results of the latent-moderated structural equation modeling indicated that peer victimization predicted mental health difficulties six months later, but mental health difficulties did not predict later peer victimization. Higher levels of perceived school climate and covitality predicted lower mental health difficulties cross-sectionally, but not longitudinally. Perceived school climate also moderated the relation between victimization and mental health difficulties. Victimized students tended to report more mental health difficulties when they perceived a better school climate. The results were consistent with the "healthy context paradox." These findings have important implications for prevention and intervention for peer victimization in China.