This study examines the impact of the opportunity cost of urban land on urban growth. Based on prices, costs and productivity data on agricultural commodities at county levels, the opportunity cost of land was measured by the weighted revenue, cost, and government payment per acre of farm lands. Aggregating county data to metropolitan area levels, a panel data for 269 metropolitan areas from 1978-2000 were constructed. This study found that, as predicted by the theory, cities grow slower when revenue increases or cost decrease in the area. The impact of commodity program payment was also examined. Our results show that price shocks and agricultural subsidies do have an instantaneous impact on urban growth by a ecting the opportunity cost of urban land.