Abstract: The rural settlements and population distribution in the loess hilly and gully area are scattered, and it is difficult to support public service facilities in accordance with traditional administrative units. It is urgent to restructure living units to guide facility allocation. This paper selects Angou Town, Yanchang County as an example, combines the theory of ‘living circle’ and the requirements of ecological civilization construction, based on the needs of villagers' facilities and ecological space units, and adopts methods such as centrality evaluation, improved gravity model and GIS spatial analysis to delimit the rural life circle coupled with ‘facility unit’ and ‘watershed unit’. The study delineated the three-level life circle of ‘primary life circle-secondary life circle-comprehensive life circle’ in Angou Town, and proposed a strategy for the allocation of facilities in each circle. The research results can provide references for the optimization of the town and village system and the configuration of public service facilities in the loess hilly and gully area, and guide the development of land and space planning at the township level.