The establishment of National Forest City represents a pivotal initiative in China's endeavors to advance ecological civilization and foster harmonious coexistence between humans and nature, substantially contributing to the enhancement of urban residents' well-being. Utilizing panel data from 285 Chinese cities over the period 2000-2022, this study regards the establishment of National Forest City as a quasi-natural experiment. It applies a multi-period difference-in-differences (DID) model and mechanism analysis to thoroughly investigate the policy's effects on urban residents' well-being and the mechanisms involved. The findings are summarized below: Initially, the establishment of National Forest City markedly boosts the overall well-being of urban residents, exhibiting a 3.14% enhancement in the treatment group relative to the control group, notably in augmenting residents' income, diversifying cultural life, and bolstering social security. Second, the policy elevates residents' quality of life and social welfare by encouraging green technological innovation, escalating energy conservation and environmental protection investments, and amplifying governmental focus on green development. Third, the policy exerts a more pronounced impact in western regions, where infrastructure and public services are comparatively underdeveloped, with residents in the treatment group experiencing an 8.30% higher level of well-being than those in the control group. At last, the policy's most significant improvements benefit from targeted support in environmental restoration, green development, and environmental governance. Based on these findings, it is recommended that the government further strengthen support for green technological innovation and environmental investments, tailor policy implementation to regional and city-specific characteristics, and enhance the precision and effectiveness of policy execution to improve urban residents' well-being comprehensively.