Abstract: Central Environmental Inspection is an environmental governance system with Chinese characteristics that exerts multiple impacts on the rural human settlement environment. This study employs a multi-period difference-in-differences method to analyze panel data from 284 prefecture-level cities over the period 2013—2023, with the aim of examining the impacts and underlying mechanisms of Central Environmental Inspection on the rural human settlement environment. The findings are as follows: first, Central Environmental Inspection has a significant and sustained positive effect on improving the rural human settlement environment; second, the green transformation of rural production modes plays a mediating role in the relationship between Central Environmental Inspection and rural human settlement environment improvement; third, the inspection effects vary across regions, with more pronounced improvements observed in areas characterized by higher levels of economic development, more complex geographical environments, and larger government size. Accordingly, it is proposed that efforts should be made to improve assessment and incentive mechanisms closely tied to inspection outcomes, strengthen a multi-dimensional support system for promoting the green transformation of production modes, and establish a regionally differentiated guidance and precision inspection mechanism, so as to deepen the effectiveness of Central Environmental Inspection and optimize the rural human settlement environment.