Abstract: This paper adopts China's provincial panel data from 1997—2008 and Shapley Decomposition Method based on regression to study regional education inequality. The result shows,although advantage of education development in developed countries is still a main factor which leads to regional education gap,budgetary spending on education and economic development among regions account more, adding to at least 60%. The contribution from education input effort decreases,and urbanization level maintains at 10% level. In fact,government should not only increase transfer payments, but also more attention must be paid to equal distribution of educational resources during urbanization process, and establishing effective encouraging mechanisms for local governments' education effort.