Abstract: The small town space is the projection of the small town function organization on the town village regional space series, thus the delimitation of the space development boundary should not only adhere to the correct value transmission, but also conform to the objective laws of the spatial evolution. The characteristics of decentralization, flattening and networking in the development process of ‘new economic flow’ affect the law of spatial evolution of small towns, and reconstruct spatial development boundaries, spatial structure levels, and spatial functional organization. This research attempts to start from the characteristics of the elements and endogenous power of the Internet's ‘new economic flow’, and takes small towns as the research space unit to construct the internal logical framework between the ‘new economic flow’ and the development of small towns, the laws of spatial evolution, and the differentiation and transfer of spatial growth. Based on the logical framework of internal relations, and taking Xiaohe Town as an empirical case, the logical framework and method of delimiting the development boundary of small towns under the action of ‘new economic flow’ are proposed:the town space development boundary based on multi-scenario simulation, and the ‘productive-ecological-life’ space development boundary based on the two-way influence of constraints and growth, in order to provide a new perspective for the delimitation of the development boundary of town-level territorial spatial planning.