In this paper, the consumer lifestyle approach is applied to analyze the impact of consumption by urban and rural households on energy use and CO2 emissions for different regions and income levels in China. Grey Model is used to compare the relationship between energy consumption, consumption expenditure and CO2 emissions for different lifestyles. The results show that direct energy consumption is diverse for urban households and simple for rural households in China. Direct energy consumption and CO2 emissions are increasing faster for urban than for rural households. Indirect energy consumption and CO2 emissions for urban households are much greater than the direct consumption values. The total indirect energy consumption and CO2 emissions differ by regions and the structures are different, but the latter differences are not obvious. The impact of household income is enormous. Indirect energy consumption and CO2 emissions are higher for high-income than for low-income households. The structural difference for indirect energy consumption and CO2 emissions for households with different income levels is significant. The higher the income, the more diverse is the energy consumption and CO2 emission structure. The structures for indirect energy use and CO2 emissions are diverse for urban households, but simple for rural households. (C) 2010 Published by Elsevier Ltd.