Gentrification is a new phenomenon of urban development in many large cites. Gentrification can be definited briefly as the widespred emergence of middle- and upper middle-class enclaves in formerly deteriorated, inner-city neighborhoods. But the concept of the gentrification is still in chaos and complexity, and so there are many explanations why the gentrification exists in a city. Under the differential explanations is the rent gap theory by far the most sophisticated teoretically developed explanation available to date. Smith's rent gap theory of gentrification has received a substantial amount of attention since it appeared in 1979. This paper reviews the rent gap theory and re-examines it from the view of point of ground rent theory, and finds that the existed rent gap theory could not completely be applied to explanation of gentrification in Taipei City.