To achieve sustainable rural development, it is necessary to simultaneously protect ecologically important land and efficiently use existing agricultural land. Land use functions (LUFs) are widely used to assess regional sustainable development. Guyuan is located in a typical hilly and gully region of western China, with ecologically fragile land. Rural land transfer (RLT) has been advocated to prevent abandonment of agricultural land and promote rational, effective utilization of the land. In this study, we used LUFs in a multi-level stakeholder assessment framework to integrate the opinions of all stakeholders in an evaluation of the impact of RLT on regional sustainable development. We employed the framework for participatory impact assessment, key informant interviews, and questionnaires to obtain data to support the development of scenarios to compare the impacts on LUFs. We found that RLT had positive impacts on each LUF in Guyuan, especially for the land-based production and food security LUFs. Importantly, the measures required to support RLT must vary among landforms and location conditions to successfully develop the LUFs and ensure sustainable development. We found that the integrated multi-level stakeholder assessment framework can comprehensively assess the impacts of land use measures on sustainable development and support regional land-use decision-making