This paper reviewed and evaluated the mobility level and the allocation efficiency of China's regional factors. Based on the revised global reference price analysis method, this paper applied nonparametric DEA- Hybrid model to evaluate the segmentation level of factor market and factors allocation efficiency in 29 provinces of China. Furthermore, the panel data of each province from 1998 to 2012 was used to construct the comprehensive weight matrix of geography distance and economy scale, and then empirical analysis through spatial Durbin model was carried out to analyze the influence of regional factor market segmentation on factors allocation efficiency. The study figured out the segmentation of factor market in China's three major economic regions, which experienced a drastic fluctuation from 1998 to 2012, and the segmentation level of factor market is lower in the eastern region compared with that in the central and western regions. The segmentation of regional factor market has negative distortion impact on the factors allocation efficiency with significant spatial spillover effect, which could be inhibited by moderate fiscal decentralization. The "beggar- thy- neighbor" strategy will not only lead to the drop of their own efficiency, but also gradually widen the gap of regional factor allocation efficiency and even degenerate the region to the "Economic Basin" in the national economic development. Moreover, the high proportion of state- owned economy, the optimization of industrial structure, the transportation infrastructure and the foreign direct investment could improve the allocative efficiency of regional factors significantly, while it remains obscure to judge the impact on the promotion of efficiency of opening. Researches on factor market segmentation and efficiency distortion of factors allocation provide great policy enlightenment for deepening the reform in a comprehensive way. It is critical to release a new round of reform dividend so as to accelerate the integration process of domestic factor market and promote trans-regional free flow of different factors. Therefore, emphasis should be placed to remove the barriers among regional factor markets and to give full play to the decisive role of market in allocating resources to improve the allocation efficiency of regional factors.