The present paper discusses the formation and development of the Neolithic settlement in China and the evolution of its social organization. In the mid Neolithic, agricultural settlements on rather a large scale were gradually formed, and the grouping of houses and tombs roughly embodied the large matrilineal family. During the early phase of the late Neolithic, the structure of settlements presented unitary planning and regular layout, reflecting on the whole the collective's spirit of soIidarity and social equality; in the late phase, social differentiation developed from initial appearance to increasing deepening, with rank-marking differences coming into being between settlements, houses and tombs. At the end of the Neolithic, i.e. in the I.ongshan period, differentiation between settlements sharpened further, which led to the formation of stratified settlement groups with the internal relationship as that between the principal and the subordinate, and in the areas of developed archaeological cultures, society entered the initial stage of civilization.