The differentiation of urban housing price is an important issue for urban geography and urban economics. The theory of housing dominance is that, the dominance and its quantification of certain urban residence against other houses is called housing dominance, which is a measurement of housing relative dominance. The housing dominance determines the housing price, while housing price is a monetary embodiment of housing dominance. It has set up the basic frame of research on housing dominance, explained its prerequisite of assumption and proposed its basic elements and evaluation method. Thereinto, the basic frame of housing dominance includes building dominance and external dominance. The assumptions are housing market of monopolistic competition, lack of inelastic of short-term supply, rational-economic man, housing market of free trade. The basic elements of housing dominance are composed by the own housing dominance and dominance of external action, including 4 aspects of single housing grade and level, community construction grade and level, location and convenience, and surrounding landscape and environment, and then revised by expected elements. On this basis, the appraisal system of housing dominance is established. The appraisal subsystems are composed of housing type and age, architectural feature, community environment, community level, location, life convenience, surrounding landscape, and surrounding environment. Then computing method of weighted summation is applied to catch the score of housing dominance. When such theory and method are applied to the case research of Yangzhou City, the result indicates that, there is obvious positive correlativity between housing dominance and housing price, which has proven that the theory of housing dominance and its evaluation system set forth herein are reasonable and feasible.