Abstract: 【Objective/Meaning】At present, the separation of homesteads' three rights, namely ownership right, contract right and management right, was still in the local pilot stage, and the complete theoretical system and practical method have not yet been formed. So, the research on the reform of homestead system could improve and promote the effective realization of the separation of homesteads' three rights. 【Methods/Procedures】Through the institutional interpretation and the analysis of advantages and disadvantages on the reform of the separation of homesteads' three rights, it was pointed out that the separation of homesteads' three rights had certain positive effect on the construction of ecological livable rural environment, industrial revitalization, broadening financing channels and solving the housing problem of floating population. But at the same time, it would also produce some problems such as the sustainable livelihood of farmers, homestead management and rent-seeking, and the income distribution of homestead rights subject. 【Results/Conclusions】It was suggested to improve the rural social security system to weaken farmers' dependence on the security function of homestead, evaluate the feasibility of system reform in various areas, follow up the relevant supporting measures and system revision, face up to the advantages and disadvantages brought by the separation of homesteads' three rights, and steadily implement the reform of land system.