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As the domestic interprovincial migrants, Uygur traders have been engaged in the Hetian jade trade from Xinjiang Uygur Autonomous Region to the city of Nanyang in Henan Province. Having lived in the private rented houses around the market in the early days, they moved into the government-built public rental housing in 2017, an independently managed community. They have maintained their past residential pattern of living around the market, and gradually develop the community into an inter-embedded multi-ethnic community together with other ethnic groups. Through the history of the formation of the Uygur community in Nanyang Stone Town, this paper presents the process of interaction between the ethnic minority migrants and the local community, examines the responses and influence of the market, society, government, and individuals in this process, aiming to understand how the minority community was formed, to deepen understanding of the "inter-embedded multi-ethnic community", and, in turn, to promote research and reflection on the development of the ethnic community during urbanization in China. This study suggests that such communities surrounding the market are socially extended based on inter-embedded livelihood. The open national market is the core of the social structure of inter-embedded ethnic groups, and market exchange is one of the main relations generated in the current interactions between the ethnic groups. The government's efforts to build inter-embedded communities are conducive to transforming the relationships among ethnic groups from limited interaction to comprehensive and balanced development. Moreover, the improvement of common living environments and increase in exchanges are conducive to upgrading interactions between individuals to extensive and in-depth exchanges among different ethnic groups. [ABSTRACT FROM AUTHOR]