Rural commercial banks are an important part of China’s financial system, and the sound and sustainable growth of rural commercial banks’ business performance can help prevent and resolve financial risks and contribute to the implementation of the rural revitalization strategy. Channel diversification and product diversification contribute to the steady and sustainable growth of rural commercial banks’ performance, but there is a lack of research in the existing literature. This paper constructs a framework for analyzing the operating performance of rural commercial banks, and describes the impact of channel diversification on the business performance of rural commercial banks and its role in suppressing the fluctuation of business performance, as well as the moderating role of product diversification. Using quarterly data of 75 rural commercial banks from 2013 to 2021, we empirically test the impact of channel diversification on their business performance and its role in suppressing the fluctuation of business performance. The Results showed that: (1) channel diversification promotes the operating performance of rural commercial banks and restrains the fluctuation of the operating performance of rural commercial banks; (2) the heterogeneity test shows that channel diversification can significantly improve the operating performance of rural commercial banks with high development quality and non-county rural commercial banks; (3) from the perspective of moderating effect, product diversification can play a moderating role in the process of channel diversification promoting rural commercial banks’ operating performance and restraining the fluctuation of rural commercial banks’ operating performance, while loan products play a positive moderating role in the process of channel diversification promoting rural commercial banks’ operating performance and restraining the fluctuation of rural commercial banks’ operating performance, and deposit products play an insignificant moderating role in the process of channel diversification promoting rural commercial banks’ business performance and play a negative moderating role in the process of suppressing the fluctuation of rural commercial banks’ business performance; (4) from the perspective of intermediary role, customer loyalty and competitive defense ability play an intermediary role in the process of channel diversification restraining the fluctuation of rural commercial banks’ operating performance, and also play an intermediary role in the process of product diversification regulating channel diversification restraining the fluctuation of rural commercial banks’ operating performance, in which loan product diversification plays a positive role, and the diversification of deposit products plays a negative regulatory role. Compared with the existing literature, this paper expands on the following three aspects: first, it theoretically explores the relationship between channel diversification, product diversification, and operating performance of rural commercial banks, revealing that the positive interaction between channel diversification and product diversification can better improve operating performance and suppress operating performance fluctuations. Second, this paper argues that diversified channels and matching diversified products can increase customer loyalty, enhance competitive defense capabilities, and thus inhibit fluctuations in business performance. Third, it further enriches the research results on the influencing factors of bank operating performance. This paper shows that rural commercial banks should adhere to the “two-wheel” strategy of channel diversification and product diversification, take customer demand as the guide, adhere to channel innovation and product innovation, and continuously meet customers’ diversified and personalized needs, which can increase customer loyalty, improve competitive defense ability, promote operational performance, and suppress fluctuations in operational performance.