Major function oriented zoning (MFOZ hereafter) is the guideline for optimizing the spatial pattern of regional development in China, which entails both theoretical and methodological innovation in the academic field of economic geography. This study analyzes the basic features of territorial function and puts forward a spatial equilibrium model for regional development for the first time. It argues that there exists a trend of regional convergence in the average value which indicates the comprehensive development status of any region. Based on this finding, the study illustrates that the formation of functional zone should be conducive to the narrowing of regional gap and that free flow of resources between regions is the prerequisite to spatial equilibrium. It also investigates the impact of territorial functional evolution on the process of spatial equilibrium and suggests that the maximization of benefits derived from zoning proposal is interrelative with the method of regional division and the degree of understanding towards the temporal changes of territorial function. Furthermore, this study goes on to examine the scientific foundation of several issues concerning the reconciliation between contradictory functions of development and protection, the selection of indicators and the spatial and temporal features of MFOZ. It is then probes into the rationality of achieving dual goals of efficiency and equality simultaneously through three-dimensional flow and spatial equilibrium. The paper ends with discussions on the position, implementation and coordination of MFOZ from the perspective of institutional arrangements of spatial governance including law, planning and government policy.