Abstract: Narrowing the urban-rural income gap is of great significance for achieving common prosperity. This article based on theoretical analysis, evaluated the impact and specific mechanism of innovative city pilot policies on urban-rural income gap using a multi time point double difference model and an intermediary model. Research has found that this policy has significantly expanded the urban-rural income gap and expanded the urban-rural income gap by enhancing the entrepreneurial vitality of the productive service industry. However, there is no intermediary effect on the entrepreneurial vitality of the manufacturing industry. And there is heterogeneity in urban location, administrative level, and market potential. During the epidemic period, pilot policies have shown a marginal decreasing widening effect on the urban-rural income gap due to the slowing down of technological agglomeration. Based on this, the following suggestions are proposed: firstly, adhere to the development of the real economy, especially pay attention to the role of manufacturing in attracting employment and narrowing the urban-rural gap; secondly, various regions should further formulate innovative urban construction plans according to local conditions to avoid policy “one size fits all” issues; thirdly, build a unified market for urban-rural factors and accelerate the formation of a new type of urban-rural relationship; fourthly, promote the equalization of urban and rural public services, and improve the quality of employment and income level of rural labor.