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Existing studies have shown that satellite synthetic aperture radar (SAR) interferometry has two apparent drawbacks, i.e., temporal decorrelation and atmospheric contamination, in the application of deformation mapping. It is however possible to improve deformation analysis by tracking some natural or man-made objects with steady radar reflectivity, i.e., permanent scatterers (PS), in the frame of time series of SAR images acquired over the same area. For detecting land subsidence in Shanghai, China, this paper presents an attempt to explore an approach of PS-neighborhood networking SAR interferometry. With use of 26 ERS-1/2 SAR images acquired 1992 through 2002 over Shanghai, the analysis of subsiding process in time and space is performed on the basis of a strong network which is formed by connecting neighboring PSs according to a distance threshold. The linear and nonlinear subsidence, atmospheric effects as well as topographic errors can be separated effectively in this way. The subsidence velocity field in 10 years over Shanghai is also derived. It was found that the annual subsidence rates in the study area range from -2.1 to -0.6 cm/yr, and the averaged subsidence rate reaches -1.1 cm/yr.