This study explores the application of Systemic Functional Grammar (SFG) to the analysis of English Business Letters (EBL). With China’s opening up to the outside, especially its entrance into WTO, international business is becoming more and more popular. Most of the transactions in international business are discussed in detail through airmail letters, telegrams, telexes, faxes or E- mails.As a world language, English is used widely in the negotiation of international businesses. Writing a piece of effective English Business Letter is of great importance. As a medium between the business partners, EBL affects the interaction and negotiation between them. This article is intended to seek the linguistic characteristics of business letters and prove that the theories of SFG can be used to analyze EBL discourse and they are actually effective. This study explores the application of Systemic Functional Grammar (SFG) to the analysis of English Business Letters (EBL). With China’s opening up to the outside, especially its entrance into WTO, international business is becoming more and more popular. Most of the transactions in international business are discussed in detail through airmail letters, telegrams, telexes, faxes or E- mails. As a world language, English is used widely in the negotiation of international businesses. Writing a piece of effective English Business Letter is of great importance. As a medium between the business partners, EBL affects the interaction and negotiation between them. This article is intended to seek the linguistic characteristics of business letters and prove that the theories of SFG can be used to analyze EBL discourse and they are actually effective.