Rural Functional Homeostasis Transformation (RFHT) refers to the process through which rural territorial systems transition from one state of functional homeostasis to another. Investigating RFHT provides a novel theoretical lens for understanding the dynamics and underlying mechanisms of rural system change. This study develops a conceptual framework and empirical methodology to examine the dynamic equilibrium characteristics and transformation mechanisms shaped by multiple interacting factors. By applying this framework to the Loess Plateau in China, we analyze annual data from 2000 to 2020 across 3550 townships. The results reveal that while the functional values of rural areas exhibit an overall increasing trend, significant spatial differentiation persists. The ecological conservation function demonstrates the highest stability, with 83.11% of ecologically dominant townships maintaining functional homeostasis throughout the study period. Notably, the dominant mode of RFHT has shifted from an economic development-oriented pathway toward a more balanced approach that integrates both economic growth and ecological conservation. The RFHT process is driven by the interplay of internal resource endowments (including population, land, industry, and ecology), market forces, and policy interventions. By distinguishing between temporary functional fluctuations and genuine steady-state transformations, this study advances the theoretical understanding of rural functional dynamics and contributes to the field of multifunctional geography. The findings also provide an analytical basis for designing spatially differentiated and functionally targeted rural development policies.