In the past ten-odd years, extensive debates and intensive studies on the impact theory, which was first proposed by Alvarez et al. (1980) on the basis of iridium abundance anomaly in the K-T boundary clay layers, have been carried out in the scientific community. Up to now, iridium abundance anomalies have been found at over one hundred K-T boundary sites, and besides impact lay- ' ers rich in impact-related metamorphic minerals have been found at many places. Studies show that both mass extinctions and impacts of extraterrestrial bodies on the earth have a nearly indentical periodicity of about 26 million years since the beginning of phanerozoic. Recently, a hidden circular structure located on the Yucatan peninsular, Mexico, with a diameter of about 180km was discovered and is considered to be an impact crater relating to the K-T event. Although the above-mentioned significant progress has been made, a number of problems need still to be answered, e. g. the origin of anomalous iridium, confirmation of craters, effect of an impact event on the earth's environment and mechanism of mass extinction. Intensive study remains to be continued. The impact theory, its development and future perspectives are reviewed in this paper.