Abstract: Based on the stochastic frontier approach, this paper investigated the efficiency difference for different ownership type banks in the period of 1996 to 2008, and analyzed the relationship between the efficiency and ownership structure. The results show that both the stateowned shares ratio and ownership concentration have a significant inverted Ushape relationship with the bank efficiency, that is, for the banks of stateowned shares ranging of 15%-50% and banks of the top three shareholders equity ratio ranging of 20%-50%, the efficiency performance is the best. In addition, the more foreign equity shares in domestic banks, the higher efficiency reveals, moreover, the combination effect of private banks and foreign equity is superior to the stateowned banks with foreign shares. Therefore, in order to optimize operational efficiency of banks, the ownership reforms for Chinese banks should focus on reducing the ownership concentration through the introduction of different shares of stateowned or nonstateowned enterprises.