The purposes of this study were to set up the index of residential environment quality in urban areas to assess the residential environment of Taipei, and to analyze the relationship between residential environment quality and residential satisfaction. Thirty-six questions were designed to measure residents’ perception of their residential environment quality. The sample consisted of 836 residents. Study results were summarized as follow: (1)Through factor analysis, thirty-six items of residential environment quality were simplified to seven factors, named “ outside space of dwellings” , “environmental health” , “green areas”, “relation of neighbors”, “accessibility to public services”, “security of neighborhood”, and “convenience of transportation”. (2)Residential satisfaction was affected significantly and positively by seven factors of residential environment quality.(3)“Environmental health” , “green areas”, “accessibility to public services” and residential satisfaction were significantly different among seven districts of Taipei. (4)Seven factors of residential environment quality were significant predictors in the regression model for residential satisfaction.