Objective: To study the incidence of catastrophic health expenditure of rural families in Xiaochang County of Hubei province, in order to explore the influential factors of catastrophic health expenditure. Methods: By using a multi-stage stratified cluster sampling to conduct a household survey, this paper randomly selects a total of a-bout 1,222 households of 4,673 people from 9 villages of 3 different towns in Xiaochang county of Hubei province, in order to compare the rate and severity of catastrophic health expenditure before and after joining the New Rural Coop-erative Medical Scheme ( NRCMS) , and it uses binary logistic regression model to analyze the influential factors of catastrophic health expenditure. Results: After joining the NRCMS, the rate, average gap and relative gap of cata-strophic health expenditure have all declined within the sampled areas; the influential factors of catastrophic health expenditure are household income, the number of working family members, the number of hospitalizations in family members, and the number of chronic patients among family members. Conclusion: With the increase of household in-come in the rural areas of Xiaochang County, both the rate and severity of catastrophic health expenditure have de-creased. In order to significantly reduce the catastrophic health expenditure in the rural areas of Xiaochang County, the government should perfectly improve the NRCMS's compensation mechanism for chronic outpatients' costs and re-duce the proportion of self-pay patients from low-income families.