Addressing poverty is one of the United Nations’ Millennium Development Goals. Alleviating relative poverty by stimulating the endogenous motivation of poor people to improve their ability for self-proliferation and diffusion is the focus of attention worldwide. China, as the world’s most populous country, has already left absolute poverty, and the vast rural areas are facing the challenge of managing relative poverty. We use the Delphi method to select three representative cases from the typical cases of rural entrepreneurship published by the Ministry of Agriculture and Rural Affairs, and describe the diffusion process and poverty reduction effect of returning farmers’ ‘entrepreneurship’ through the whole process analysis method. We found that the entrepreneurship diffusion model based on returning farmers has a bright future and great potential to improve rural poverty. Using family and local ties and the internet, returning farmers can effectively spread their entrepreneurial experience to other poor households, lowering their entrepreneurial risks and barriers, and thus collectively bringing more farmers out of poverty. The entrepreneurship diffusion of returning farmers can increase farmers’ income, promote the employment and entrepreneurship of poor households and improve the rural ecological environment, thus alleviating the multidimensional poverty of farmers in economic, social and ecological aspects. This provides an experience and reference for developing countries to solve the problems of poverty, especially poverty governance in rural areas. It is worth noting that implementing the diffusion of entrepreneurship among returning farmers requires the support of appropriate policies and the active participation of local governments.