With social and economic development, the rural habitat is constantly improving and developing in terms of infrastructure, landscape style, environmental health, cultural heritage, and information technology. At the same time, rural human settlements are facing a number of problems and challenges, such as the urbanization of rural landscapes, the serious commercialization of rural landscapes, the weak awareness of environmental health protection, the reduction in the diversity of rural cultures, and the existence of the digital divide and the spread of technology. Based on the above problems, this paper takes Hongmiao Village, Mahe Town, Hubei Province, China, as the research object, and through the field research on the village, we understand the current situation of local development and potential problems. On this basis, the strategy of empowering participatory design in rural habitat transformation is proposed. Starting from the design of the public space in front of and behind the house, the field transformation is carried out mainly through digital technology to break the spatial limitation of traditional art, and mobilizing the joint participation of multiple subjects to enhance the villagers’ main consciousness. Finally, through the methods of return survey, corresponding questionnaire, and inductive analysis, this study proves that participatory design provides new theoretical support for the transformation of the rural habitat environment and has important reference value for the improvement of the rural habitat environment.