Revealing the mechanisms driving the evolution of territorial space functions serves as the logical foundation for construct-ing a synergistic and complementary territorial spatial system. This study employed panel data from 283 Chinese cities from 2007 to 2022 and applied kernel density estimation, fixed-effects models, and mediation analysis to examine the impact mechanisms and path-ways of land transfer prices on the evolution of territorial space functions. The results indicated that: ① From 2007 to 2022, land trans-fer prices and the territorial space production-living-ecological function index in each city showed an overall upward trend. The added value of land transfer prices showed a “high in the east and low in the west” spatial pattern, with high-value zones concentrated in coast-al urban agglomerations, while low-value zones clustered in the northwest and southwest regions. Production and living functions dis-played “high in the east and low in the west, and high in the south and low in the north” distribution patterns, whereas ecological func-tions shifted from an east-west gradient to a north-south polarization. ② Land transfer prices significantly accelerated the evolution of territorial space functions, with stronger effects on production and living functions than on ecological functions. The promoting effect was more pronounced in non-core cities than in core cities. ③ Land transfer prices exerted partial mediating effects through industrial structure upgrading on production functions, infrastructure development on living functions, and ecological restoration on ecological functions. In core cities, land transfer prices primarily drove the evolution of territorial space functions through industrial structure up-grading and ecological restoration, while in non-core cities, they mainly operated through industrial structure upgrading and infrastruc-ture development. The transmission mechanism of land transfer prices on the evolution of territorial space functions was the result of ef-ficient markets and proactive government intervention on the development and conservation of territorial spatial patterns. Based on the above conclusions, the following policy recommendations are proposed: policymakers should utilize the land transfer pricing mechanism to regulate land supply quantity to facilitate industrial upgrading, optimize land allocation to support infrastructure development, and stabilize land revenue to assist in ecological restoration, thereby promoting coordinated development among production, living, and eco-logical functions.
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