Abstract: Following the general-to-special modeling method and using the China's time series data from 1978 to 2015, this paper built a nonlinear dynamical system model of urbanization deviation and the urban-rural income gap. The equilibriums of the model were analyzed, and the optimal control of policy objectives was simulated. Results show that:Urbanization deviation and urban-rural income gap have complex nonlinear effects. Two of the three equilibrium points of the system are saddle points, and one is repellor. There is no attractor, so the system is relatively unstable. As the level of urbanization deviation and urban-rural income gap at the saddle point are lower than the current level, and the better equilibrium point is even close to the lowest level in history, they can be used as the targets of control policies. The virtual optimal control shows that, the linear quadratic control system with a saddle point as the control target is controllable. By choosing the appropriate control policies, the system can converge to the ideal target state. The policy implication is that it is necessary and possible to make control policies to narrow urbanization deviation and urban-rural income gap.