Based on the sustainable livelihood framework and the household survey data from Jiujiang in Jiangxi Province and Xiangyang in Hubei Province,this paper conducts a quantitative research to understand the land-expropriated peasants’ decision-making behavior in how to use the compensation,and further analyzes factors affecting the use of compensation and impacts of different uses of compensation.It is found that how to use the compensation heavily relies on the family livelihood capital and the amount of compensation; the land-expropriated peasants neither squander all the money nor leave the all for retirement,but make reasonable arrangements according to the livelihood assets,the amount of compensation and the demand for funds; the effect of the Policy of Land for Money depends on the use and the amount of the compensation.Adhering to this policy,it is suggested to promote the voluntary transfer of land after land expropriation,introduce the Entirevillage Advancement in land expropriation,increase the proportion of monetary compensation and guide peasants to use monetary compensation for productive purposes.