This research aims at clarifying modernization process of Busan, Korea and finding how the city had developed by capital and commerce. When it became Japanese Annexation of Korea in 1910, Japanese developed Busan by large scale. The number of the Japanese who emigrate to Busan increases, various kinds of construction and the development project also increase, and it becomes a bigger city. With these developments, Busan strengthens character as a commerce-and-industry city, the influence is reflected also in the composition of a city area by development of the commerce and industry of Busan, and the tendency for the city areas to specialize functionally came to be more clearly. When development of the west side of the Yongdu mountain progresses, Japanese's place-of-residence division has visible signs that it extended to the west greatly. And the east side of the Yongdu mountain becomes the area which has a function as a business area. In addition, Choryang, Busanjin area, and Youngdo Island which were the suburban areas in Busan, there become a manufacturing area. With enlargement of the city, it is shown that each area had each features functionally within the period of Japanese annexation of Korea.
