Using panel data of 450 farm households for the period of 1996-2001 in Zhejiang, China, we measured land distributional effect and income effect of the land rental market. It is found that the rental market had contributed for a less equal land distribution among the households, and for the concentration of land to households with higher efficiency. With a land rental market in a dynamic economic development process, improvements in overall production efficiency of the households, however, mainly come from the reduction of land abandonment and the contribution from land changing hands is very limited.