•The paper evaluates the hybrid compensation governance in Hangzhou.•Hangzhou's land acquisition compensation has been improved in many aspects.•Land-lost villagers are still subject to various uncertainties.•Newly emerging socio-economic problems need to be addressed.•The paper compares different compensation measures. This paper focuses on evolving land acquisition compensation policy and practice in Hangzhou, a better-developed coastal city in the Yangtze River Delta Region, by assessing the evolution of land acquisition compensation and the interplay among the main actors, especially the local government and affected individual villagers and rural collectives. It evaluates the hybrid compensation governance that includes monetary compensation, employment alternatives, share-holding co-operative, social security assurance, and rural collective retained land. The study reveals that while land acquisition compensation has been gradually improved in many aspects, land-lost villagers are still subject to various uncertainties in sustaining their lives, competing in the labor market, and adapting to urban life. Furthermore, markedly improved land acquisition compensation in Hangzhou has created newly emerging socio-economic problems amongst dislocated rural villagers. The paper reveals how different compensation measures have redefined rural collectives and land-lost rural villagers in the urbanization process.