Achieving green development demands simultaneously balancing between economic growth and pollutant emission reduction, which can have complex impacts on regional disparities. This study measures the green development efficiency (GDE) for 266 Chinese cities during the 11th–13th National Five-Year Plan periods (2006–2020) by a global non-oriented endogenous directional distance function (endogenous DDF) that endogenizes direction vectors using the maximum improvement potential. Regional disparities are then quantified and decomposed by the Dagum Gini coefficient decomposition (intra-group, net inter-group, and hypervariable density) across seven regions. To make the policy implications operational, we further derive the separable economic efficiency loss and environmental efficiency loss components from the endogenous DDF and identify cities’ optimal preference options (γ); scenario experiments (5–30% improvement) are used to validate whether differentiated improvement directions can simultaneously raise GDE and narrow disparities. The main findings are as follows: (1) From the 11th Five to the 13th Five, cities’ GDE evolved from a median-centered distribution to a bimodal distribution, accompanied by spatial polarization and widening regional disparities. (2) By the 13th Five period, regional disparities had deepened, mainly driven by inter-group differences, notably hypervariable density. The original regional development patterns were disrupted, leading to increased overlap across cities. (3) Most cities have shifted from a “green-oriented” to an “economic-oriented” development preference since the 13th Five period. North China, South China, and East China favor pollution reduction, while others prioritize economic growth. (4) Preference options for cities with varying resource endowments should adapt over time. Under various hypothetical scenarios, cities adopting differentiated optimal options can enhance their GDE while simultaneously narrowing regional disparities. Reducing arbitrariness in balancing emission reduction and economic growth can promote regionally coordinated and environmentally sustainable development.