The root cause of Urban-rural Binary Separation Structure comes from the differences between urban and rural institutions in China. With the evolution of urban-rural relationship，this differentiated system gradually moves from rigid constraints to loosening，which constitutes the institutional basis of urban-rural integration and development，and also fundamentally determines the basic aspects of urban-rural reform. The Urban-rural Binary Separation Structure of the whole province can be deconstructed into the population structure of half citizens and half peasants with partial weak integration，stable urban high and rural low income structure，basic public service structure with high differentiation under tight budget constraints. Under the appearance of this structure，there are some deep-seated problems，such as the low level of integration development，the poor circulation of marketization factors，the poor allocation of resources，and the weak governance ability. In the 14th Five-Year Plan Period，the development of urban-rural integration in Shandong province should start from the reality of large agricultural province and large population province，connect the two strategic conjunction points of urbanization and rural revitalization，guide the way by testing，activate the elements，build strong facilities，and solidly promote the development of urban-rural integration.