Abstract: The aims of this study are to meet the requirements of economic new normal in China, and optimize the severe imbalance of income structure between urban and rural areas. Work complication and household discrimination were found to be the main causes of income imbalance between rural and urban areas through analysis of the current situation and causes of income distribution structure. Then the optimization path of income distribution in urban and rural areas was given, which included improving rural education, accelerating reform of household registration system (canceling the limitation of farmer and non-farmer), implementing integration of social security in urban and rural areas, increasing expenditure on infrastructure in rural areas, and developing rural inclusive finance so as to improve farmers’income.