Abstract: Perfect interest mechanism is an important guarantee for the success of rural community land readjustment in Taiwan. This paper analyzed thoroughly the interest mechanism of rural community land readjustment in Taiwan by using the methods of documentation and case analysis, and the public choice theory, externality theory and other theories. Rural community land readjustment in Guogou rural community was taken as a case, this paper deeply analyzed the interest mechanism, with which Guogou rural community had improved its agricultural production conditions, peasants’ living standard, and rural ecological environment. The results showed that land reclamation in mainland should take example by Guogou in Taiwan.