Abstract: 【Objective/Meaning】The relationship between financial development and urban-rural income gap has always been a hot topic in the field of economics and finance. The discussion on the relationship between financial development and urban-rural income gap is not only of theoretical significance for the study of macro issues, but also provides certain policy enlightenment for narrowing the urban-rural gap and increasing farmers' income. 【Methods/Procedures】Based on the data of Fujian province from 1985 to 2017, the VAR model was built by using the EViews software. On the basis of the co-integration test of financial development level and urban-rural income gap in Fujian province, the dynamic correlation between these variables was further studied through impulse response analysis and variance decomposition. 【Results/Conclusions】The results showed that in the long term, the scale of financial development would increase the urban-rural income inequality, while improving the efficiency of financial development would help to narrow the gap. The function mechanism of financial development on the urban-rural gap lay in direct and indirect aspects: on the one hand, the urban tendency of financial resources would make the urban-rural income gap widen with the increase of financial development level; On the other hand, the level of financial development might indirectly affect the urban-rural income gap through the intervening variable of urbanization. Therefore, while increasing the policy support for rural finance, it was also important to pay attention to the acceleration of financial development on urbanization, so as to form a good mechanism for the coordinated urban-rural development.