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Recently, increasingly sophisticated studies have investigated the relationship between agrarian livelihoods and the environment, as well as rural-urban interactions in developing countries. The policies developed to respond to these dynamics can constrain livelihood options or provide additional opportunities. In the present study, using a modified version of the telecoupled sustainable livelihood framework to generalize dynamic livelihood strategies in the context of rural-urban transformation and by focusing on recent research in China, we review important factors that shape rural livelihood strategies as well as the types of strategies that typically intersect with livelihood and environmental dynamics. We then examine telecoupled rural-urban linkages given that the dynamics of the livelihood strategies of farmers can cause flows of labor, capital, ecosystem services, and other processes between rural and urban areas, thereby placing livelihood strategies in a dynamic context, which has not been considered widely in previous research. We show that most previous studies focused on the reduction of environmental impacts via livelihood diversification and rural-urban migration. We propose several areas for future policy development and research.