Abstract: Under the background of unconventional monetary policy and high budget deficits, the effects on interest rate term structure by supply and demand of treasury bond has got wide attention of academic group. Using the data from China inter-bank bond markets, the paper gives an empirical test on the preferred-habitat term structure model with supply and demand factors. The results show that, the interest rate term structure is not sensitive to bond supply factors , while the bond demand variable has significantly negative effects not only on the key interest rates, but also on level factor , slope factor and curvature factor of interest rate term structure.