Abstract: In order to provide preliminary reference for the optimized of rural settlements area and intensive use of land the spatio-temporal distribution of rural settlements in Loess Hilly Area, Gangu county was analyzed,. Based on the remote sensing images of Landsat-5 TM in 1998 and SPOT 5 in 2008, the method of landscape pattern analysis and GIS spatial analysis were used to discussed spatio-temporal variability and optimized spatial distribution of rural settlements in Gangu county from 1998 to 2008. The results showed that from the perspective of temporal distribution, the proportion of the area of rural settlements in the total land area increased from 3.69% to 5.45% in the last decade; patches number (NP) and total plaque area (CA) increased by 114.77% and 47.76% respectively. The settlement patches have a high density of 1.68 per km2 at present; The patches were quite different over the two periods and the average plaque area (MPS) decreased. From the perspective of spatial distribution, the density of rural settlements in 2008 was significantly higher than that in 1998, the distribution pattern of rural settlements vary spatially as dense in the northeast and areas around county, while sparse in the southwest. Rural settlements showed a strong association with the elevation, slope, traffic and water resources, and they mainly located in areas with low altitude, gentle slope and closed to road or river. For the coordinated social and economic development of urban and rural areas and the successful realization of well-off society, it is necessary to optimize spatial distribution of rural settlements in Gangu county with three development patterns of the priority development, extension development and centralized development.