Abstract Background With the rapid population aging, healthy aging has become a concern for society as a whole. In this study, loneliness and its relationships with activity-related individual factors were examined among older Chinese individuals from the perspective of mental health and daily leisure activities. Methods The data were from the fourth investigation of the Sample Survey of the Aged Population in Urban and Rural China, which had a total of 220,506 participants. Activity ability was assessed by the Barthel Activity of Daily Living Index, a self-designed activity type questionnaire was used to evaluate activity participation, and loneliness was measured with a single-item question. Results The prevalence of varying degrees of loneliness among Chinese older individuals was 36.6%. The prevalence of loneliness among the older individuals differed significantly by age gender, age, physical health status, annual household income, education level, marital status, living status, ethnic minority status, religious faith and territory of residence. There were differences in activity participation among older Chinese adults in terms of all the demographic factors mentioned above, while there were no significant differences in living status or religious faith, and significant differences in several other demographic factors in terms of activity ability. Self-care ability, as a form of activity ability, and activity participation significantly predicted loneliness among the older participants. Conclusion The topic of loneliness among Chinese older individuals is complex and requires greater attention. The buffering effect of activity-related factors on loneliness suggests that old people should improve their activity ability and participate more in daily activities.