Abstract: As the foundation of a modern economy, finance plays an important role in promoting economic development and regulating income distribution. This paper takes the provincial panel data of China from 2010 to 2020 and uses location entropy to measure the agglomeration levels of three major financial industries, including banking, insurance and securities, and then uses the spatial Durbin model to analyze the impact of financial agglomeration on income gap based on the urban-rural dual structure perspective. Findings show that (1) there is an inverted U-type relationship between financial agglomeration level and urban-rural income gap in China; (2) The financial agglomeration has strong spatial spillover effect; (3) There are significant differences in the effects of the agglomeration level of different financial industries on the income gap between urban and rural residents, among which the agglomeration of banking industry can narrow the income gap between urban and rural areas, while the agglomeration of insurance industry widens the income gap between urban and rural areas; (4) There is heterogeneity in the spatial spillover effect of financial agglomeration in different regions, among which the spillover effect is most obvious in northeast China. To narrow the income gap between urban and rural residents, the paper proposes to promote the reform of financial system, and make full use of spatial spillover effect to build economic growth poles, and formulate differentiated financial policies.