Rural ecological transformation aims at realizing the economic values of ecological resources while protecting resources and the environment, so as to achieve the win-win situation of ecological environment protection and economic development. This article reviewed different paths of rural restructuring and their negative and positive impacts on the ecological environment and economic development since the reform and opening-up, namely rural industrialization, urbanization, and rural non-agricultural transformation. On this basis, we point out that rural ecological transformation is an inevitable choice to realize rural revitalization and sustainable development for agricultural villages that are located in major ecological function areas. This is a joint result of external factors such as the turn of recognition of rural functions and ecological civilization construction, and internal factors such as rich ecological resources in the rural areas and rural population’s needs for development. On the one hand, the functions of agricultural production and ecological protection are getting increasingly more important in rural regions, and on the other hand, natural capital is increasingly scarce. Therefore, the natural resources and ecological environment in rural areas can become the unique advantages for rural transformation and development. Based on the theory of Ecological Modernization and the characteristics of ecological economic development, this article discussed the possible paths of rural ecological transformation from the perspectives of factor inputs and key participants. We put forward that the essential factors for rural ecological transformation is knowledge instead of capital. Taking into consideration the characteristics of behaviors of the government, community, and other stakeholders in receiving and applying knowledge, this article suggested that it is more suitable for the rural community to participate in knowledge input. Finally, this study took the practice of ecological transformation in Chenzhuang Village of Jiangsu Province as an example to analyze the strategies of knowledge input and community participation in rural ecological transformation and their effects. The result of this study may help deepen the theoretical understanding of the necessity and paths of rural ecological transformation and provide some practical experiences for the ecological development of rural areas.