Abstract: Rural society, economy, culture and ecology have undergone some significant changes in the transition period from high-speed growth to high-quality development in China, particularly with the rapid industrialization and urbanization. Among them, the rural settlement is one of the indictors in the rural socioeconomic activities, including their multifunctionality. Furthermore, the number, scale and shape of rural settlement vary greatly in the background of the transformation and development of rural society. Therefore, it is very necessary to explore the coupling relationship between functional diversity and settlement evolution for the rural revitalization and sustainable development. In this study, a theoretical framework was firstly constructed for the functional diversity and rural settlement evolution in mountain areas. The study area was taken as the Fengjie County in the hinterland of the Three Gorges Reservoir Area. 21 indicators were selected from the three dimensions of production, living and ecological function. Four indices of landscape pattern were selected as the indicators from four dimensions of area, shape, density and aggregation. Secondly, the comprehensive evaluation model was used to calculate the composite index of rural functional diversity and rural settlement evolution. The coordination degree model, spatial autocorrelation model and elasticity coefficient model were combined to explore the coupling relationship between rural functional diversity and rural settlement evolution. Finally, the driving mechanism was determined using geo-detectors. The policy suggestions were also proposed, according to the regional conditions. The results show that: 1) The average composite indexes of rural functional diversity and rural settlement evolution increased from 0.222 to 0.281 and 0.184 to 0.262 during the study period, respectively, indicating a faster growth rate. The coupling coordination degree of the two systems increased year by year. The number of dysfunctional towns decreased with the patter of "low in the west and high in the east, low in the south and high in the north". 2) There was a positive correlation between rural functional diversity and the evolution of rural settlements at the township scale from 2000 to 2020. There were the outstanding spatial agglomeration. The high agglomeration areas were mainly concentrated in the outskirts of the central towns, such as Yong'an, Yu Fu and Kui Men Street. 3) According to the increase-decrease relationship of the composite index, the townships were categorized into four coupling modes: vibrant, declining, transforming and traditional type. 4) Socio-economic parameters (such as population density, per capita GDP, and intensity of human activity) were the main driving factors. Most of the interactions among the driving factors were nonlinearly and two-factor enhanced properties. The interactive driving factors with greater explanatory power were found in the land use degree/cultivated land area, number of rural employees/transportation convenience, human activity intensity/cultivated land area. Consequently, it is necessary to promote the positive interaction between rural functions and rural settlements in the process of rural revitalization. The adaptability of rural settlement transformation and development also need to improve for the sustainable and healthy rural development.