This study investigates the impact of the abolition of People’s Communes in the early 1980s on rural fertility in China. Exploiting the staggered implementation of agricultural decollectivization, we show that decollectivization led to a significant decline in rural fertility, independent of the impact of family planning policies. Counties with higher levels of egalitarianism during the commune period experienced a sharper fertility decline following decollectivization, indicating that the elimination of egalitarian income distribution is the key mechanism behind this fertility decline. We find no evidence supporting the alternative hypothesis that the fertility decline was due to increased opportunity costs of childbearing associated with higher agricultural productivity after decollectivization.