It remains to be analyzed and verified whether agricultural machinery services（AMS） can explain the “involution” phenomenon that agricultural land transfer does not promote the trend of moderate agricultural scale operation in China.Based on a sample of smallholders from the China Rural Household Panel Survey（CRHPS），this paper analyzes the situation of smallholders in the land rental market and the effect of adoption of AMS on their land rental decisions and conducts an empirical test using a three-stage least squares model（3SLS） and mediating effects model.The estimation results showed that smallholders’ adoption of AMS significantly reduced the likelihood of participation in the land rental out and increased the likelihood of participation in the land rental in，where AMS acted indirectly on smallholders’ land transfer decisions through their effects on agricultural labor inputs，agricultural technology applications，and farm income.The study demonstrates that agricultural machinery services can，to a certain extent，explain the slowdown of the rental rate of smallholders in land transfer，the replication of smallholders in which small-scale land was rented in and part of their land was rented out，and the “involution” phenomenon of the decreasing effect of agricultural land transfer on agricultural productivity in China.It is suggested that when formulating policies concerning AMS，agricultural policy makers should objectively pay attention to the phenomenon of “involution” of the land rental market brought about by the development of AMS and meet the production needs of small-scale farmers to maintain household livelihoods and the service needs of land transfer households to promote moderate scale land management.