The management of rural planning and construction is a crucial aspect of spatial governance and rural revitalization. The rural construction planning permit (RCPP) system serves as a primary means of controlling rural planning and construction in China. In the context of the urban-rural dual structure, the implementation of this system faces challenges and problems, and there is a lack of sufficient research attention and systematic study on this system. This paper establishes a research paradigm of the regulatory basis-implementation status-optimization strategies. Taking Shanghai, China, as a case study area, on the one hand, it analyzes the relevant regulatory basis at various levels and highlights the challenges in the implementation of the system. On the other hand, it explores the issuance of RCPP certificates, analyzes the main problems in the system's implementation, and then proposes reflections and discussions on the optimization of the implementation of the system. The study finds that the current regulatory basis of the RCPP system is still incomplete, with problems such as unclear definition of applicable scope, and the status of village planning as the basis for issuance of RCPPs has not been established. Additionally, there are variations in how the system was applied across provinces and even between different districts of Shanghai. In Shanghai, the implementation of RCPP system faces problems such as unclear qualification recognition for applicants of village residential construction, conflicts between management standards and villagers' building habits, incomplete realization of temporary construction and public service facility projects, inadequacy of land indicators to meet reasonable housing needs of villagers, and occurrences of actual construction exceeding the approved RCPP and illegal construction activities in rural areas near cities. The study discusses optimization measures in terms of the scope of system application, village planning formulation system, approval authorities, application processes, and postapproval supervision. This research aims to address the lack of systematic research on the RCPP system, providing effective tools for optimizing rural planning and construction, and offering valuable insights for rural development and spatial governance in other developing countries or regions.