Abstract: Agricultural machinery subsidy plays an essential role in promoting and guiding the agricultural mechanization in China. From the perspective of agricultural machinery service providers, this study constructed a theoretical modelof the demand of service providers for large agricultural machinery and applied double-logged panel data of 13 majorgrain-producing provinces to investigate the effect of subsidy and influencing factors for the demand of large agricultural machinery. Empirical results showed that 1) agricultural machinery subsidy promoted the large agricultural machinerydemand significantly; 2) the income of agricultural machinery services was the most critical factor, which was correspondingto the target of service providers; 3) the price and private investment are insignificant factors; and 4) the demand variedamong different regions. In order to attract more service providers to increase the supply of the agricultural machineryservices, this paper suggests that the government should give priority to the agricultural machinery service suppliers insupporting policy, their large agricultural machinery demand in particular and the proper combination of the subsidies from central and local government should be encouraged. In addition, the government should also consider other supportingpolicies for agricultural machinery services.