The early Western urban planning theory has provided a vital reference for modern urban planning in China. After the illustration of the development of Western urban planning theory during World War II, the definition of satellite city has been introduced in detail by taking the planning theory of satellite city as an example. The development of satellite city has been summarized, that is, "lying city-semi-detached satellite city-active satellite city"; their characters have been illustrated; then, the effective application of this theory in urban areas of London and Paris has been introduced. Finally, by taking Shanghai and Xi’an City for example, it has introduced the practical application of satellite city theory in modern urban planning of China, and concluded the function of satellite city in Chinese urban construction. It hopes to provide a reference for satellite urban planning theory guiding practice, so as to control and evacuate urban people scientifically, promote the functional orientation and spatial distribution balance of towns and cities, and finally facilitate the sustainable development of living environment.