Abstract: Exploring rural households' urbanization willingness and its influencing factors from the perspective of livelihood plays an important practical role in improving farmers' sustainable livelihood ability and promoting urbanization process. Based on the framework of sustainable livelihood analysis, this paper builds a conceptual framework of farmers' urbanization willingness. Based on survey data of rural households in Taojiang County of Hunan Province, this paper analyzes the differences between rural households' urbanization willingness and livelihood capital and adopts a binary logistic regression model to explore the influencing factors from the perspective of sustainable livelihood. Results show that farmers' willingness to settle in cities is not high at this stage. Among them, 18.84% of the surveyed farmers have a clear intention to settle in cities, especially in small towns. There is a difference in livelihood capital among rural households with different willingness to settle in cities. Rural households that are willing to settle in cities have significantly higher human capital, financial capital, natural capital, and vulnerability context than those who are not willing to move to cities. But their physical capital stock is lower than the latter. Specifically, effective labor force quantity, the dependency ratio of family and the total income have significant positive impacts on farmers' willingness to settle in cities and towns, but the distance from cities or towns has a significant negative influence. To enhance the urbanization willingness of rural households and promote the efficient development of new urbanization in China, the government should strengthen the sustainable livelihood ability of farmers at different levels, focus on improving farmers' financial capital, and promote the transformation among farmers' various livelihood capitals. At the same time, expanding the coverage of urban public services to solve the urbanization livelihood needs of urban migrant farmers is also very important.