Under the background of new-type urbanization and rural revitalization strategy, how to promote the development of urban–rural integration has become an important issue in today’s society. This paper designed a new evaluation mechanism for the development level of urban–rural integration. Specifically, a three-level evaluation index system of urban–rural integration development level was established from four aspects: spatial integration, economic integration, social integration and living environment integration. By combining the entropy weight method with the ranking method, a combination weighting method was proposed to determine the weight of each index in the index system. Furthermore, an improved TOPSIS method based on relative entropy and grey relational degree was proposed to evaluate the development level of urban–rural integration, which considering proximity from the perspectives of distance and shape and solving the problem that some situations cannot be compared through the original model. Then, the established evaluation mechanism was applied to make an empirical analysis for evaluating the development level of urban–rural integration in Hubei Province, China. Cluster analysis and obstacle factor analysis were used to further analyze the evaluation results. Finally, according to the evaluation results, some effective countermeasures and policy implications were provided to improve the development level of urban–rural integration in Hubei Province.