Nowadays, rural development that determines the progress of building the moderately prosperous society is the most concerned work of Chinese governments, and several national strategies and policies like rural revitalization and urban-rural integrated development were proposed to promote the rural development. The key of rural revitalization strategy implementation is to realize urban-rural cooperation by their mutual supports, and thus it is urgent to shed light on the dynamic mechanism of rural development oriented urban-rural integration. This paper first established a conceptual framework of dynamic mechanism of rural development oriented urban-rural integration, and then the structural equation model (SEM) including 5 latent variables and 16 observation variables was applied to validate this dynamic mechanism based on data of 120 towns in Xuzhou city of 2018. Lastly, corresponding policy implications for rural development in China were proposed. It was found that: urban-rural integration could be classified into urban-rural homogeneous integration and complementary integration, and the homogeneous integration implied that rural areas pursued the same conditions and treatments as cities, and the complementary integration referred that in the urban-rural competition, rural advantages should be created from the opposite perspective of urban areas, like leisure activities, ecological tourism and healthy development. Urban-rural homogeneous integration was the external driving force of rural development, while urban-rural complementary integration was the internal driving force. External driving force included two aspects of urban-rural infrastructure and public service integration, and they impacted rural development indirectly with corresponding effect of 0.1558 and 0.6836, respectively; internal driving force also included two aspects of rural attraction and rural factors conglomeration, and they impacted rural development directly with corresponding effect of 0.702 and 0.3356, respectively. The urban-rural infrastructure integration firstly improved conglomeration level of rural factors like capital, land and labor, and then promoted rural development; similarly, urban-rural public service integration firstly improved rural attraction, and then made countryside developed. In terms of policy implications, multidimensional rural development dynamics should be established from the views of urban-rural homogeneous integration and complementary integration, and external driving force should be mainly created by government investment, while internal driving force was created and shaped by rural planning. Governance boundaries among market, government and society (locality) with respect to the creation of rural development dynamics should be defined. Rural revitalization should follow the law of rural life cycle and delimit its geographic space according to different rural types. This study reveals rural development dynamics mechanism from a perspective of urban-rural integrated development, which has an importance guidance for governments to implement rural revitalization strategy at the operational level.