Suburbanization is a world common phenomenon in the past several decades and studies on this subject usually have important policy implications. Literature reviews show that rising income and improved transportation system are two most significant driving forces for suburbanization. In this study, the author extends William Alonso's model to study the suburbanization of Taipei. The basic layout is that a city with fixed boundary locates at a featureless plain, and has a point-like central business district (CBD) and a circumferential suburban business district (SBD). The relative frequency of trips to each district is dependent on the population ratio of the inner city to the suburban area, the degree of advantage of the CBD, and residential location. Simulation results of this study show that the magnitude of income elasticity and transportation cost elasticity of the population density gradient for 1997 Taipei are about 1.2. The author hopes this study can shed more insight on the evolution of population distribution of Taipei.