Abstract
This article explains the transition of Danwei system, including related employment system, housing allocation system and social welfare system, and its influences on residents’ daily life and the formation of urban structure. Then, based on the casework on Sanyuan Company, the authors analyze the mechanism of the transformation of traditional Danwei Dayuan (the work unit compound) to new urban community. Finally, the authors bring forward a prospect of Danwei system in the market oriented economy.