Based on literature review and game theory,this paper studies the allocation of land invisible overflow efficiency among stakeholders in the process of rural homestead conversion.The result shows that farmers are the disadvantageous groups in the rural homestead conversion,whose legal interests couldn’t be guaranteed;ways of compensating farmers are single and social security of farmers is inadequate; the existing rural homestead system constraints the conversion of rural homestead land,all of the above is the root of conflicts and contradiction among stakeholders.Therefore,this paper proposes several suggestions on how to alleviate the contradictions among farmers,rural local government and homestead users.First,property rights of homestead should be defined,tripartite relationship of ownerships should be reconstructed and rural homestead conversion market should be established and perfected.Second,body behaviors of local governments should be standardized to ensure the dominant position of farmers and protect the interests of farmers’ homestead property.Third,the leading roles of rural collective organizations should be strengthened and the collective incentive and restrained mechanisms should be established in homestead conversion.Finally,suitable homestead compensation substitutes should be selected and perfect rural social security systems should be established.