Abstract: The third distribution is one of the most important mechanisms to achieve common prosperity, but the research on the third distribution emphasizes the significance of public welfare distribution and ignores the value of mutual benefit distribution. This paper holds that public welfare distribution is based on a higher moral dimension and plays a leading role in demonstrating social values, but blindly pursuing pure public welfare will only limit the scale of the third distribution, and recognizing the importance of mutually beneficial distribution will help expand the coverage of the third distribution and enable more groups to share the fruits of development. In the process of promoting common prosperity, mutual benefit distribution is helpful to expand the participants, consolidate the cultural foundation and clear the ideological obstacles. From the perspective of the institutionalization of the third distribution itself, mutual benefit distribution and public welfare distribution form a coupling relationship. The former provides the motive force for the latter, while the latter provides the intermediary for the former. Together, they promote the institutionalization of the third distribution from the aspects of standardization, sustainability and conventionalization. In practice, we can open up the way by strengthening the guidance of party building, building acquaintance communities, increasing policy support, and promoting altruistic culture, so as to better play the role of mutual benefit distribution and help achieve the goal of common prosperity.