This paper, by means of Theil index method and factor analysis, applies single index and synthetic indexes to analyze the evolution and characters of urbanization level difference (ULD) among cities in Shandong province, and concludes that the ULD among cities in Shandong province diminishes and so do the ULD in east, middle and west Shandong, but the regional ULD expands. The ULD displays in general an internal difference in middle Shandong. The Comprehensive ULD is reflected in three aspects, modernization level, building density and environmental quality, and exists an east-west gradient difference regionally.