With the rising of urban rail transit planning and constructing in China, the relationship between rail transit and bus must be located. After analyzed the inevitability of competition and the necessity of cooperation between rail transit and bus, this paper strategically located the relationship between rail transit and bus. At last, based on the characteristic of competition between rail transit and bus, this paper brought forward specific measures of staggering competition with cooperation corresponding to different rail transit develop stage to implement rail transit and bus. Higher level competition will be formed, and the competition result is not “single win” but “both win”.