Rural collectively owned commercial construction land marketization (RCCCLM), a land policy that is still being piloted despite being allowed by law, has been regarded as an indispensable policy tool that can meet the land demand for rural development. This study aims to analyze the typical modes and key paths of RCCCLM for rural transformation theoretically and practically. We developed an innovative theoretical framework of “Situation-Structure-Implementation-Outcome” to illustrate the relationship between RCCCLM and rural transformation. By tracing the process of the impact of RCCCLM on rural transformation in typical areas, this study fills the gap in existing research that has not yet explored the theoretical mechanisms between RCCCLM and rural transformation. The results show that a combination of such factors as geographical location and rural land use status brings about three major ways of RCCCLM, namely, local marketization, adjustive marketization and consolidation-based marketization, to promote rural transformation. The influencing mechanism of RCCCLM on rural transformation mainly concerns rights granting, rural land use structure reshaping, the transformation of farmers’ livelihood and improvement in rural governance capacity. Rural transformation follows a basic rule and phased characteristics of evolving from single function to multiple functions, and RCCCLM displays a differentiated driving effect on the evolution of rural functions in different stages of rural development. These findings will provide new insights into rural land use and rural transformation in China and other developing countries and help solve the bottlenecks in rural transformation.