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Rural space development and value distribution are the material basis for sustainable rural development. Rural development problems in China's farming areas relate to limited space, unclear ownership, inefficient organization. Rural spatial governance takes material space and the spatial relationship as governance objects, combining the fair distribution of space with the participation of multi-stakeholders in rural development. This paper examines “matter–organization–ownership” governance path for rural areas, analyzing the efficiency of spatial governance, and investigating the “population, land, industry, and urban–rural relationship” transformation mechanism needed for rural development. We selected Xiangbu Village, a typical farming village, for empirical research to verify the internal relationship between spatial governance and rural development. Xiangbu Village has significantly improved its rural collective organization, public service ability, space asset value, and other aspects through multi-scale and multi-means governance paths. In Xiangbu Village, collective power and spatial governance reconstructed the multi-stakeholder structure of the village, transforming the spatial connection from weak to strong and improving the spatial and overall benefit structure. The process of rural spatial governance involving multi-stakeholders has promoted individuals' land rights claims, the participation of multi-stakeholders, and the will to return to start businesses in Xiangbu Village. The space rights reorganization process of public spatial governance in Xiangbu Village provided the economic, organizational, and material space foundation for industrial development. While spatial governance brings opportunities for village development, it also brings risks. The collective power supervision and restraint mechanisms are imperfect, and problems with the participation and coordination of the ternary forces of government, market, and society still need an urgent solution.
•A conceptual model of rural spatial governance based on “matter–organization–ownership” path is constructed.•Investigating mechanism of “population, land, industry, urban–rural relationship” transformation drive rural development.•Coordinating the internal relationship between spatial governance and rural development in China's farming areas.•Combining “bottom-up” and “top-down” of rural spatial governance is the current alternative path for rural development.•China's rural development needs to carry out spatial governance based on its own conditions and foundation.