Abstract: We gather 14 kinds of service industry from 2003 to 2010 as samples in this paper to study the effect of service industry and political intervention to the agglomeration of service industry. And discuss the substitution effect of social capital and government intervention in the service industry agglomeration. The study found :There is a "inverted U" type structure Between social capital and service industry agglomeration .which means that in a certain range the social capital has a positive effect on the service industry agglomeration ,After the inflection point , social capital has a negatively effect on the service industry agglomerations.We also found that the role of social capital and government intervention are interchangeable in the service industry agglomeration .In other words ,when no government intervention is available ,social capital tends to have a stronger influence on the service industry agglomeration ,vice versa .