Biological contact oxidation process is attractive and widely used in rural sewage treatment, due to its simplicity and relatively superior pollutants elimination efficiency. However, the effluent total nitrogen (TN) and excess sludge yield during the biological contact oxidation process still need to be intensified to stably satisfy the discharge standard. In the current study, an enhanced rural anoxic/oxic (A/O) biological contact oxidation process with air-lift reflux technique was properly established, which achieved better pollutant removal efficiency and lower excess sludge yield. Under the pathway of air-lift reflux technique, the TN and ammonia nitrogen (AN) removal capacity of A/O biological contact oxidation process were obviously increased from 66.5% and 73.8% to 95.3% and 80.6%, respectively, which should be attributed to the increasement of nitrifying bacteria (Nitrospira and Nitrosomonas) and denitrifying bacteria (Denitratisoma, Thauera, and Dechloromonas). The excess sludge yield was also decreased from 0.19 kg MLSS/kg COD (no reflux model) to 0.11 kg MLSS/kg COD (air-lift reflux model) since the degradation of returned oxic sludge in the anoxic tank, which was verified by stable isotope tracer analysis. The rural A/O biological contact oxidation process with air-lift reflux technique had great potential to strengthen TN removal and reduce sludge generation, which could provide a useful and easy-implement technology for rural sewage treatment.