Time granularity is a key parameter necessary for short-time passenger flow prediction of urban rail transit (URT); however, no universal method is available for its setting. This study investigates the time granularity setting principle for short-term passenger flow prediction in URT. First, a method to measure the autocorrelation of passenger flow time series is constructed, focusing on the comparison of time granularities. Second, based on the functional relationship between the first-order autocorrelation coefficients of the passenger flow time series under different time granularities, the time granularity setup principle is obtained for different passenger flow characteristics. Finally, the reasonableness and universality of the time granularity setting principle are verified by analyzing the passenger flow characteristics and autocorrelation magnitude of the actual inbound and origin-destination (OD) passenger flow data under different stations and dates at different time granularities.