Abstract: In early 1990s, the development of Spatial Economics laid down certain theory foundation for the study of spatiality of economy. Such spatial research is defined as the research of economic spatial pattern in spatial economy to explain the reasons and formation mechanism for phenomenon of spatial agglomeration. Some tools, such as Theil entropy index, relative entropy index, Coefficient of Variation and half-logarithm economic growth model, are utilized to analyze the evolution of the spatial and temporal distribution and the variation of Foreign Direct Investment (FDI)as well as economic growth effect of FDI in the Pan-Yangtze Delta. The models of spatial pattern of FDI and economic impact of spatial variability for FDI are constructed respectively. A wholly trend of diffusing is found on the spatial distribution of FDI in Pan-Yangtze Delta. The diffusing way is along the "Z" shape spool thread, and the diffusing forms include two kinds:one is the contagious proliferation and the other is the hierarchical proliferation. The hierarchical proliferation is more remarkable after 2001. Based on correlated statistical data from 1990 to 2007, variation degree and economic effect of the five provinces and Shanghai city of Pan-Yangtze Delta were worked out. The results showed that FDI have been playing a positive role to the regions economic growth. However, the efficiency is different in different regions. The variation degree of FDI is inverse correlated to economic growth. Based on above findings, three fields should be concerned when making and implementing related policy of FDI. Firstly, trying to create friendly financing environment and further consolidate and enlarge the scale of FDI after world financial crisis. Secondly, establishing expedite FDI spreading corridor and optimizing its special framework. Spatial framework and variation which based on capital efficiency are decided by rent seeking nature of FDI. It is concentrated on Shanghai firstly, and spread to the other provinces. In order to improve the practical efficiency of FDI, open FDI spreading channel should be constructed by every region. Then FDI can be allocated appropriately and effectively used under the market mechanism. Last but not least, the harmony of regional development should be kept to promote national economic revitalization. The blue print of the Pan-Yangtze Delta Area should be designed and even all Yangtze River valleys as soon as possible in the background of harmonious development at the national level.