The earliest university is an urban product of the west Europe in the middle ages,whose functions and roles become extensively disseminated and expanded.Hence,it is argued that a proper understanding of the university is closely related to the social and economic background.In medieval times, agricultural economy sustains the market and urban development,while the urban feudal and commercial economy gives birth to the university.Capitalist economy is the catalyst of universities.Relations are analyzed between university and church,power and people at large.