Abstract: The paper evaluates the efficiency of service industry in 31 provinces of China in 2009 by three-stage DEA model. The empirical results are as follows: firstly,service industry’s operation efficiency has a remarkable relationship with human capital,technical innovation and government’s support; secondly,if the effects of exogenous environment variables and random shocks are not controlled,the pure technical efficiency of 31 provinces will be underestimated,and scale efficiency value will be often overestimated; thirdly,due to lack of pure technical efficiency,the technical efficiency of 31 provinces with the average of 0.520 is low; moreover,China can be divided into four types according to pure technical efficiency and scale efficiency; lastly,the efficiency of service industry in East,Central and West China differs wildly,that is to say,the one in East China is the best and the one in West China is the worst.