Abstract: With the development of society, the traditional residential building form has gradually failed to meet the needs of modern people’s life, which urgently needs to be updated and developed. At the same time, there are many practices in the transformation of traditional dwellings. However, there are also many problems in the transformation. For example, the innovation of architectural design is insufficient, the transformed buildings cannot be integrated into the regional architectural environment, and the traditional construction skills are missing, and so on. Therefore, traditional residential transformation strategy needs more rigorous generation process. The basic idea of Extenics is to use formal methods to deal with contradictions in various fields, which is very suitable as a tool for scientific analysis of contradictions and feasible strategies in the practice of residential transformation. Baoshui Village is taken as an example, the problem model established based on Extenics, the objectives and conditions analyzed, the contradiction solved through the extension transformation method, the strategy generated, and finally excellent standard evaluating method used to obtain the optimal strategy. The generation process of extension strategy for rural residential transformation is explored. On the one hand, it can provide a reference for the formalization of the practice process of rural residential transformation in the future, and on the other hand, it can make the culture of traditional rural residential continue and regenerate.