It is of great importance to the study of the dynamic extension of a city and its peripheral towns for simulating, predicting, adjusting and controlling urban extension, and for rationally protecting the farmland and using land resources. The extension of Chengdu and its peripheral towns is studied here by using LANDSAT TM satellite images respectively acquired in 1987 and 2000. Firstly, The images are registered to the GIS data. Secondly, the Different Building Index(DBI) is formulated by LANDSAT TM7-TM4 on the basis of analyzing the remote sensing image mechanism of the cities and towns and their background, which reflects the situation of construction. The model of extracting Chengdu city and its peripheral towns from DBI image is formulated by the threshold method. The spatial data of Chengdu city and its peripheral towns for the two periods is extracted from the remote sensing images of the two periods by calculating DBI and applying the model. Thirdly, the sprawl data of Chengdu city and its peripheral towns are obtained by overlaying the spatial data of the two periods. Finally, the sprawl data of each analytical unit obtained by masking or overlaying the sprawl data with the administrative boundary, the third circular road and the highway around the city are analyzed. It is shown that the spatial data of the two periods can be effectively extracted by using DBI and the extraction model. The GIS technology is especially suitable for analyzing the sprawl of the city in each unit. The sprawl area in the highway around the city is about 11132 hm², which is 1.3 times of its original area. The sprawl area in the third circular road is about 6546 hm², which is 0.9 hm² of its original area, and mainly occurrs in the western, northwestern and southwestern parts, and most of which are external extensions. Between the third circular road and the highway around the city, the sprawl mainly occurs in the northwestern and southwestern parts,expanding mainly along the road. The sprawl pattern is mainly caused by the construction of high technology area and the spatial difference of investment and residential environment. In the five districts, Wuhou district is of the highest sprawl, which is 2.5 times of its original area. The sprawl area is over two times of its original area for each peripheral town, which is higher than the sprawl multiples of the city.