The considerable gap between urban and rural areas in China has been one of those social problems during the urbanization process. Since the early 2000s, an increasing number of theoretical and empirical studies have discussed the association between urbanization and urban-rural income gap (URIG) in China. However, a very limited consensus has been reached so far, which makes it challenging to support formulating well-informed policies. To identify factors contributing to different conclusions of the effects of urbanization on URIG in China, we conducted a systematic literature review of 29 empirical studies and stepwise meta-regression analysis from 94 direct effect-size estimates. Our findings reveal that while urbanization is associated with larger URIG when URIG is measured via urban-rural income/consumption, urbanization is associated with smaller URIG when URIG is measured with inequality index (e.g., Theil index and/or Gini coefficient). Additionally, financial development is correlated with larger URIG. By contrast, human capital level, agricultural support policy, and farmland scale contribute to narrowing URIG. Finally, we did not find a significant publication bias from the primary studies. This work suggests that it is worth to conduct more in-depth analysis to examine the heterogeneous effects of different indicators of URIG and their associations with other potential driving factors. Future work is suggested to investigate the effects of financial development level, human capital level, agricultural support policy, farmland scale, and urban land scale on the relationship between urbanization and URIG. In the urbanization process, policymakers need to pay attention to the practice of remedying income-based urban-rural inequality.