Based on the data about China's listed companies over period 2004-2007,this paper analyzes the type of ultimate controller,pyramidal structure and the separation between controlling shareholders' control rights and cash flow rights to investigate the relationship between vertical ownership structure and controlling shareholder's embezzlement of listed company's funds,which is a proxy of tunneling.The results indicate: i) the degree of controlling shareholders' tunneling in the central government ultimately controlled companies is the least,the degrees of controlling shareholder's tunneling in the natural person  and local government ultimately controlled companies don't have significant differences; ii) controlling shareholders in government ultimately controlled companies tunnel through productive operation while controlling shareholders in natural person ultimately controlled companies tunnel through nonproductive method; iii ) the more the pyramidal structure layers in natural person controlled companies and the bigger the degree of the separation between the ultimate controller's control rights and cash flow rights,the more severe the tunneling of controlling shareholders; iv) in central government controlled companies ,the less the pyramidal structure layers and the more severe the tunneling of controlling shareholders,the capital occupied by the controlling shareholder in  companies that have separation between control rights and cash flow rights is more than that in companies that don't have.