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Farmland property rights allocation such as farmland transfer has an important impact on economic development in rural areas and farmers’ livelihoods in developing countries. Examining the impacts of the external socioeconomic conditions helps realize the desired farmland transfer. This study attempts to analyze the underlying influencing factors of farmland transfer in urbanizing China. In particular, 18 underlying influencing factors are selected to describe urbanization and natural condition. Pearson correlation coefficients are computed to measure the linear relationships between underlying influencing factors and farmland transfer. The geographical detector method is further employed to quantify the individual effects of urbanization on farmland transfer and the interaction effects of urbanization on farmland transfer by assessing the degrees of spatial stratified heterogeneity. We discover that the effects of urban–rural basic living allowance gap, regional GDP per capita, urban population proportion on the proportion of transferred farmland area, proportion of farmland transferred to non-farmer users and proportion of transferred farmland cultivated non-grain crop are the strongest, respectively. The indices of urbanization level present have higher effects on farmland transfer than those of the urban–rural gap. Meanwhile, the interaction effect between two urbanization indices enhances the effect on the farmland transfer. Our study is believed to deepen the understanding of urbanization on farmland property rights allocation in rapidly urbanizing areas. It offers new insights into realizing the sustainable land use strategy in the socioeconomic transition in developing countries.