Farmland transfer in developing countries is characterized by informal contracts. Rich research typically attributes this phenomenon to the lack of property rights and rarely emphasizes the influence of land characteristics themselves. Utilizing plot-level data from 2017-2019 collected in Yangshan County, China, we evaluate the impact of land consolidation on the farmland transfer market transformation. We find that land consolidation has a positive impact on the transformation of farmland transfer markets, instead of its scale expansion. After land consolidation, the scope of transaction partners extends from relationship-based households to anonymous new agricultural operating entities; the transfer rent shifts from being free of charge to being paid; and the transfer duration shifts from short-term to long-term. Mechanism analysis reveals that land consolidation increases land value and reduces transaction costs by improving the endowment of farmland resources, thus driving the farmland transfer market transformation. Further exploration warns that market transformation caused by land consolidation may trigger non-grain farming, leading to a 15.2% reduction in the rice planting area and posing potential risks to food security. These findings enrich the existing studies that only focus on the impact of land rights reform, both theoretically and empirically. In practice, it has important policy implications for countries facing similar difficulties in the farmland transfer market as China.