Incorporating smallholder farmers into the green development of agriculture is mainly constrained by their diverse goals of production and factor endowment limitations. Deepening division of labor and developing outsourcing services in agriculture can break the bottlenecks of performing green production by smallholder farmers’ indirect investment. Additionally， through market competition and reputational incentives， service providers can develop an endogenous incentive to operate in an environmental-friendly way. Further empirical analyses based on fertilizer application reduction show that outsourcing services can significantly reduce the amount of fertilizer application and outsourcing services have stronger promotion effects on small-scale households than large-scale households in terms of fertilizer application reduction. Moreover， the fertilizer reduction effect of the adoption of outsourcing services has increased significantly along with the expansion of joint-plant scale. Therefore， it is necessary to promote horizontal division of labor and guide smallholder farmers to implement joint plant to accumulate sufficient market capacity for agricultural outsourcing services. It is also proposed to deepen vertical division of labor， cultivate agricultural service providers and develop service scale operation， so as to promote the marketization of agricultural green development through the prosperity of outsourcing service market.