Dueing to the opening ofTan-Sui harbour to international market in 1860, the Da-Dau-Cheng region in Taipei city gradually becomes the economic and cultural center in northern Taiwan. Since then this region has one of the most important collecting and distributing center of tea, groceries and cloth. This paper focuses on the following issues: What is the background for the rise of cloth industry in Da-Dau-Cheng region? How is the process of its development? And which factors have influenced transformation of the process? We try to answer the above questions and aims at offering theoretical insights to socio- economic history of Taiwan by the ecological approach and the world economy point of view. To direct our inquiry, we divide our discussion about development of cloth industry in Da-Dau-Cheng region into three parts. First, we investigate the ecological location and the rising background of it. Second, we divide its developmental process from 1860s to 1980s into five stages : classical dependence period (1860-1894), colonial dependence period (1895-1940), World War II period (1937-1945), recovering period (1946-1964), and industrializing period (1965-1980). Lastly, we further analyze the factors, which influence transformations of this process, like that international division of labor and world economy, the colonial economy ruled by Japanese imperialism, World War II and cold War between communist China and free China, and export-orientation insustrializing policy and its byproduct putting-out system.