China's urbanization process has been rapidly advancing, providing a wealth of potential opportunities for displaced farmers. Urbanization not only increases the urban population but also gives rise to emerging market demands, such as urban construction, real estate, services, technology, and innovation. These sectors offer displaced farmers greater employment and entrepreneurial prospects. Typically, these farmers have lost their agricultural land, but they can find economic support in urbanization through land transfer and new land utilization patterns. This paper aims to explore the employment and entrepreneurial opportunities and challenges faced by displaced farmers in the urbanization process. Through a comprehensive analysis of relevant literature, we can observe that displaced farmers encounter numerous opportunities in urbanization. However, they also confront a series of challenges, requiring collaborative efforts from the government, society, and the displaced farmers themselves to achieve sustainable development and social integration.