Purpose: The purpose of this study is to examine the association between mixed-ownership reform (MOR) and audit fees. Unlike conventional ownership diversification, MOR retains state control while introducing non-state shareholders, creating dual governance objectives and additional complexity that may alter auditors’ risk assessments and pricing decisions. Design/methodology/approach: Based on 10,897 observations of listed SOEs from 2013 to 2023, this paper examines the relationship between MOR and audit fees in China using an ordinary least squares regression design and a staggered difference-in-differences (DiD) model. The MOR is measured by three measurements to capture absolute, proportional, and relative changes in ownership structure. Findings: This study finds that intensified MOR is associated with increased audit fees, and the staggered DID results confirm a causal link between the reform and rising audit costs. Further analyses reveal heterogeneity across institutional environments: the fee effect is stronger in Eastern and Central provinces, in competitive industries, in provinces with strong government willingness to decentralise, and among local SOEs. Moderating analyses suggest that foreign shareholder participation mitigates fee increases, while financial reporting quality plays a limited role. Additional tests show that MOR is associated with a higher likelihood of modified audit opinions, and for SOEs whose state shares are less than 20% pay significantly higher audit fees than those with over 50% state shares. Originality/value: This study contributes to the literature by integrating MOR into audit pricing research, demonstrating that ownership restructuring in SOEs has both governance benefits and assurance costs. We highlight that MOR increases governance complexity and audit risks, leading to higher audit fees. These findings enrich the understanding of how institutional reforms interact with external assurance and provide important implications for policymakers balancing governance improvement with audit cost considerations.