Activating endogenous development momentum is a crucial pathway for achieving effective governance of rural human settlements. Drawing on the theory of collective action, this study, using Jiangsu Province as a case study, employs data from the 2022 China Land Economic Survey along with the OLS model and mediating effect model to systematically examine the impact of rural industrial integration on the performance of rural human settlements environmental governance. It also explores the mediating role of village collective action between rural industrial integration and the performance of rural human settlements environmental governance. The findings indicate that rural industrial integration significantly and positively influences the performance of rural human settlements environmental governance, a conclusion that withstands endogeneity treatment and robustness testing of the model. Mechanism analysis reveals that village collective action, encompassing organizational leadership and farmers’ participation, plays a pivotal mediating role in the relationship between rural industrial integration and the performance of rural human settlements environmental governance. Further heterogeneous analysis demonstrates that internal integration, multi-functional expansion, and technology penetration integration models notably enhance the performance of rural human settlements environmental governance, while vertical extension of the industrial chain shows no significant effect. Particularly in villages with a lower level of collective economic development, the positive impact of industrial integration is more pronounced. Consequently, the government should refine policies supporting industrial integration, explore mechanisms that facilitate the transformation of industrial integration to foster collective action, mitigate environmental risks associated with vertical extension integration of the industrial chain, accelerate the development and strengthening of rural collective economies, and enhance the performance of rural human settlements environmental governance.