At present, the use of chemical inputs in China’s agricultural production lacks unified supervision and effective constraints, which brings about very serious environmental pollution and quality and safety problems of agricultural products. At the beginning of the 21 century, the European Union effectively resolved the contradiction between production and ecology by implementing cross-compliance mechanism. This paper explains the policy content and management mechanism of cross-compliance, analyzes its impact on social welfare and producer behavior, and puts forward its enlightenment to China based on the comparative analysis of the policy environment between China and Europe. The results show that conditional subsidy and ecological orientation are the main characteristics of cross-compliance mechanism. The content of the cross-compliance includes SMR and GAEC. The former aims at maintaining public health environment, food safety and animal welfare, while the latter aims at farmland soil protection and water resources management. Cross-compliance mechanism has eased pressure of resources and environment as well as reduced market and trade distortions of EU. Farmers with large-scale and specialized operation have higher cross-compliance intention, but there may be path dependence on traditional production mode in green production transition. Accelerating the cultivation of new agricultural business entities, completing market information mechanism linking price and quality are important conditions for implementation of agricultural green transformation policy.