The optimization and propulsion of urbanization is an important assistor for regional development and poverty alleviation in Liupanshan Contiguous Destitute Area. The development of urbanization in Liupanshan Contiguous Destitute Area shows a general upward trend. But there is a big gap between its development degree and the national average. Its development degree is even in low position in fourteen Contiguous Destitute Areas of China. There is also an obvious difference among the sections of Shanxi，Gansu，Qinghai and Ningxia in this Area. The development of urbanization in this Area still have to face many outstanding problems such as the general backward situation，unbalance in development and lack of industrial support，etc. The new-type urbanization in this Area should take human urbanization and rule of law as the starting point，coordinate endogenous and exogenous powers，and link up policies and measures such as the strategy of One Belt and One Road，relevant planning of this Area and the four provinces，grasp the opportunity of national comprehensive pilot program of urbanization，match new-type industrialization，informatization and agricultural modernization. It should not only advance on the whole，but also adjust measures to local conditions. It may explore feasible ways to reform and improve systems and mechanisms such as cost sharing mechanism of citizenization，investment and financing mechanism of urbanization，realize the organic integration of factors as natural environment，politics，and economy，culture and tradition based on approaches such as orderly processing the citizenization of rural population，optimizing the layout and forms of urbanization，etc.