The paper employs the rural industrial integration development pilot policy as a quasi-natural experiment, based on unbalanced panel data from 1291 counties in China from 1999 to 2022, and uses the Difference-in-Differences (DiD) method to study how rural industrial integration development affects the urban-rural income gap. Research has found that the integrated development of rural industries can significantly narrow the income gap between urban and rural areas in counties, and the optimization of industrial structure, new urbanization, and the synergistic effect of the two are the main mechanisms involved. The effect of narrowing the urban-rural income gap through the integration of rural industries is more pronounced in western regions and areas with larger urban-rural income gaps. The integrated development of rural industries has brought about an increase in the income levels of both urban and rural residents, and the growth rate of rural residents' income is greater than that of urban residents, which is in line with China's development goal of common prosperity. Based on this, in the future, the pilot scope of rural industrial integration should be further expanded, the policy support system should be improved, the coordinated development of urban and rural areas should be coordinated, the optimization of industrial structure should be promoted, and the linkage between rural industrial structure optimization and new urbanization should be promoted.