This paper begins with analyzing the concept of land use performance and summarizing the theories from home and abroad in terms of the rational utilization of land,its evaluation methods and its evaluation system. Based on these theories, a further research is carried out on the principles of the land use performance evaluation,, its methods and its models. At the same time, an approach of the land use performance evaluation in shanghai is explored. The indicator system for the evaluation is constructed according to the orientation of land policy and the optimization of resources allocation. By distinguishing the different types of the land utilization and its indicators, a land use performance evaluation scheme is put forward, which considers the whole city on the macro level and the functional districts on the mid-level. The paper provides a systematic theory as well as a feasible technical basis for the establishment of the mechanism to optimize the allocation of the land resources, which is based on the land use performance.