Zipf's Law is an important principle to determine city agglomeration and urban system rationality,which reflects the simple and accurate relationship between city size and its rank . Since the definition of cities in Zipf's Law has roused much controversy due to the too macro spatial scale that cannot exactly reflect the actual city size,scholars have moved on to the functional urban areas (city clusters) at the micro level,which breaks down the traditional administrative boundaries . To solve this problem,this article introduces a new method of defining city boundaries from abroad—City Clustering Algorithm to analyze China's city size distribution,that is,a″city″is defined as a maximally connected cluster of contiguous populated sites within a prescribed distance l and above a population density cutoff threshold D .These established city clusters are used to analyze China's city size distribution,with the sum of population of all populated sites within each city cluster as its population .The main findings of this article are shown as follows :First,China's city size distribution basically obeys Zipf's Law,indicating that the urban system based on employed population has a rank-size distribution,namely,a relatively balanced development of cities with different ranks .Second,by comparing the results of the city size distribution based on City Clustering Algorithm and the results at different scales of prefecture-level cities,counties,townships and streets,it has been proved that City Clustering Algorithm is an effective method to study the city size distribution,which breaks down the traditional administrative boundaries and makes up for deficiencies at both the macro (underestimating the number of small city clusters with a small sample of cities) and the micro (overestimating the number of small city clusters with data errors) level .Third,this method can reflect actual city sizes,making the results more scientific and reasonable;the effectiveness and robustness of this method have been verified by the related analysis of US,Great Britain and China (this article) .Last but not least,with regard to China's current new era of the urban and rural dual structure in transition and the abolishment of the boundaries between urban and rural areas,it is of great significance to define the urban functional areas (or city clusters) according to certain rules (just like the combination of the distance threshold and the population density threshold in this paper) and to set up China's cities based on the urban functional areas . However,there are two main deficiencies in this study :One is the lack of data accuracy at the micro level,which is obtained by matching the employment data of the second (2008) economic census data and the spatial map at the level of townships and streets in 2000 after data correction;the other one is lack of population data at the micro level,making it impossible to be compared with the result of employment data at the micro level .