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The objective of this study is to address two questions that are pertinent to the issue of transportation and urban spatial structure. First, we investigate whether the improvement of the subway system affects the spatial structure in the Seoul metropolitan area. Second, if so, we examine whether it contributes to the suburbanisation of population and employment or spatial concentration around the urban centre. To do so, we focus on the improvement of the subway system in Seoul metropolitan areas between 2000 and 2010 with micro population and employment data. Because of the interrelationship between population, employment and transportation, we control for the interplay between population, employment and subway network by using a simultaneous equation model. Our results provide several interesting findings. First, the improvement of the subway system plays an important role in changes in urban spatial structure. Second, the improvement of the subway system significantly affects job growth in the urban centre and subcentres in the city of Seoul. Third, the interrelationship between population, employment and public transportation generates redistributive effects that are substantially associated with urban growth and decline, and determine urban spatial structure.