Fundamental principle, applicable geological condition, domestic and oversea development of underground gasification and its advantage compared with traditional underground coal mining are introduced. The key problems of structure of gasifier carrying out underground gasification, selection of gasification process and parameters, test on physical and chemical properties of coal and rock under high temperature, geophysical propecting measuring and monitoring and controlling, large diameter directional drilling and so on are analyzed. Countermeasures on developing underground gasification in China are presented.