In this paper the kriging method is used to compute the spatial variations of rainfall, and the analysis of average error variance is applied to rain gage network design. Actual data of 8 rainfall gages in the hillslope area of Taipei City are used. First the distribution of the existing rain gages are assessed. Then, the optimum sites of the rain gages to be added to the network are studied. Seven more stations are recommended to be installed in the hillslope area of Taipei City.