Based on the segmentation of the labor market, rural workers into urban employment market for urban resident have the substitution effect, and complementary effect. If the latter is stronger than the former, urbanization will raise the income level of urban residents. The data of Hebei province show that the level of urbanization increased by 1 percentage point, can pull the income of urban residents increased by 2.6 percentage points;And further, the urbanization rate increased by 1 percentage point, can improve the wage income, operating income, property income and transfer income increased by 1.99, 5.36, 0.93, 3.30 percentage points respectively; In the long term, there is a co integration relation among disposable income of urban residents, the number of urban population and GDP per capita;every percentage point increase in the unmber of urban population drop disposable income of urban residents by 0.39 percentage points; every percentage point increase in GDP per capita raise disposable income of urban residents by 0.95 percentage points. In order to better play the role of urbanization to promote urban residents’ income, here are a few things to keep in mind. First, pay attention to the leading function of city group network and small towns. Second, accelerate the adjustment of industrial structure, and optimize the structure of employment. Third, establish the long term mechanism to ensure the improvement of urban residents’ income. Finally, change the traditional ideas, and promote the formation of new civil society.