In this paper we examine the formation process of the spa town in modern age, by doing the case study of the Atami spa, Shizuoka. This spa town had prospered since Edo period. Our presumption goes on the basis of changes occurred in the community and the space structure of this spa town during both Meiji and Taisho period. In this paper, we study about the modernization of this town, by considering the next three factors; the various aspects of hot spring inn (Ryokan), the development processes of hot springs, and the changes of space structure.