It is always an important academic and policy issue to understand the impact of hospital distance on Chinese inpatient service demand in rural areas. It employs household survey data collected from 97 villages in Shandong in 2006 and 2008, and investigates the influences of hospital distance on the demand of famars in rural areas. The discrete choice model is constructed to estimate the inpatient service demand function for patients in rural areas. The empirical analysis finds that the hospital distance is significantly affecting Chinese inpatient service demand in the rural areas. The longer the distance increases, the lower the visiting rate drops. In addition, the impact changes with the changes of hospital level; the lower the primary hospital is, the higher the impact would be. It paper provides new evidence for the understanding of the geographical characteristics of medical health care.