Abstract: ［Objective］ With the advantages of diverse functional positioning, flexible line layout, economic and environmental protection, low-carbon, etc., the low-capacity urban rail transit system has become an important part of urban rail transit development. However, due to its characteristics of diverse system modes, diverse application environments, and different development processes, it is necessary to study the problems currently existing in the construction and operation of the low-capacity system. ［Method］ A development overview of the low-capacity urban rail transit system is introduced. Combined with relevant national policies, challenges faced by the system in the construction and operation process are analyzed from the aspects of operational efficiency, project cost, investment and financing models, and modes selection. ［Result & Conclusion］ Corresponding development suggestions are put forward from the aspects of promoting integrated construction and networked operation to improve operational efficiency, implementing intensive land use and streamlined configuration to reduce project costs, adopting innovative investment and financing to reduce local government debt risks, and conducting post-evaluation or benefit evaluation of operating projects. It is also recommended to select the low-capacity system mode according to local conditions and build an economical and applicable multi-level, multi-mode low-capacity system.