Background This study aimed to investigate the difference between cycloplegic and noncycloplegic refraction and evaluate the pseudomyopia prevalence in Chinese preschool children during the outbreak of COVID-19. Methods A cross-sectional study was conducted in the Tongzhou District of Beijing, China. Refractive error was measured under both noncycloplegic and cycloplegic conditions with autorefraction. The difference between noncycloplegic and cycloplegic spherical equivalent refraction (SER) and pseudomyopia prevalence were analyzed. Pseudomyopia was defined as SER <=-0.50D in precycloplegic assessments and >-0.50D in post-cycloplegic assessments. Results Out of the 1487 participants who were enrolled in the study, 1471 individuals (98.92%) between the ages of 3-6 years completed all required procedures. A statistically significant difference in refraction was observed between noncycloplegic and cycloplegic measurements, the median of difference in spherical equivalent refraction (SER) of 0.88D (dioptre)(0.50,1.38). There was a high intraclass correlation (ICC) between these two methods for cylinders (ICC = 0.864; 95% CI, 0.850-0.877). The median DSE for myopia, emmetropia and hyperopia were 0.25D (0.00, 0.38),0.25D (0.06, 0.50) and 1.00D (0.62, 1.38), an hypermetropes showed considerably greater differences than myopes and emmetropes (Kruskal-Wallis test, H = 231.023, P = 0.000). Additionally, girls displayed a greater DSE than boys. Furthermore, when comparing against-the-rule (ATR) and oblique astigmatism, it was found that with-the-rule (WTR) astigmatism had the largest DSE. The study found varying prevalence rates of myopia, emmetropia, and hyperopia with and without cycloplegia, which were 1.90% vs. 10.06%, 11.49% vs. 50.31%, and 86.61% vs. 39.63%, respectively. Additionally, the overall prevalence of pseudomyopia was determined to be 8.29%. Participants with pseudomyopia had a significantly higher mean difference in SER (DSE) compared to non-pseudomyopic participants. Conclusions Cycloplegic refraction is more sensitive than a noncycloplegic one for measuring refractive error in preschool children. Pseudomyopia is prevalent in preschool children during the COVID-19 outbreak period. Our study indicates the possibility that cycloplegic refraction should be performed in preschool children routinely.