In recent years, intense commercial district development has resulted in rapid urbanization along with uprising and blooming commercial activities in Taipei City. The northeastern part of the Metropolitan Taipei areas is the ideal center to balance future development trend. The Neihu District, located in the northeastern corner of Taipei City, has the best living environment. With the completion of the cross Keelung River bridge, the development in the Neihu District has accelerated over the years. This is the second wave in the development history of this area. The first wave of land reform in 1968 focuses mainly in housing and recreation development. As population growth increases to almost 5 times in the last 10 years, the crucial land planning strategy in year 2000 is to provide effective infrastructure planning such as greening, parks and shopping malls to satisfy the increasing population needs with the limited supply of available land. Markov Chain is a prediction model that uses the concept of transition matrix to display and quantify spatial land use changes. It may be used to compare land use changes in different time periods and to predict future potential development. Incorporating recent theoretical advent, remote sensing and geographic information system techniques, this model may be able to achieve thorough spatial land use planning and management. This study, therefore, uses the Markov Chain model to assess the subdivision land use changes for year 1997 to 2002. These results are further used to predict land use pattern in 2007, assuming the change rate remains unchanged. The prediction results are then compared with the actual situation. Detail analysis of land use change may facilitate effective control of the characteristics and trend of space development. This provides the necessary guidelines for future land use planning and leads the Neihu district to becoming the frontier for economic development in Taipei City.