With the rapid expansion of urbanization to the suburbs or the transformation from counties to districts, the original township governments have been quickly transformed into urban street offices. However, this rapid adjustment has led to dual contradictions faced by the street offices during the transition period, including common issues faced by urban streets and adaptive issues during the transition phase. How to adjust the internal governance structure and functions of grassroots departments during the transition phase has become an urgent issue for developing streets during the transition period. Therefore, this study first systematically sorts out the three models of current street governance structure reform: the burden-reducing model, the empowerment model, and the mixed model. Secondly, holistic governance can effectively solve the “fragmentation” problem existing in the process of reforming the street administrative system. Based on this, a matching model of street governance structure and governance functions during the transition period is constructed, clarifying the relationship between the vertical governance structure, horizontal governance structure, internal governance structure, and their governance functions within the street governance system. Finally, the internal structure and functional positioning issues of street governance in Y District of L City are analyzed in detail, and countermeasures and suggestions for the reform of grassroots governance in streets during the transition period are proposed from the three dimensions of power, structure, and function.