Abstract: Providing effective treatment for rural domestic sewage is a significant challenge in supplying public goods to rural areas. In recent years, funding shortages have made it difficult to sustain operations for rural domestic sewage treatment facilities. To promote the development of a beautiful and livable countryside and support rural revitalization, it is essential to determine whether farmers are willing to pay for these services. This study focuses on the Lashihai watershed in Yunnan Province as a case study and uses the contingent valuation method to estimate farmers’ willingness to pay for rural domestic wastewater treatment. The study also identifies the factors that influence farmers’ willingness to pay by employing a multivariate ordered logistic model. Finally, the study evaluates the cost-effectiveness of farmers’ willingness to pay based on operating costs. The findings reveal that most farmers have the willingness and ability to pay for rural domestic wastewater treatment, and their willingness to pay can cover the operating costs of appropriate treatment processes with low, medium, and high treatment effects. Additionally, the study shows the significant positive effects of farmer’s subject consciousness and income related to environmental improvement on their willingness to pay. Therefore, charging for rural domestic sewage treatment is justifiable both socially and economically, and the government should establish a farmer payment system to increase the funding source.