Objective To compare operational efficiency, characteristics, and shortage of upper first-class general hospitals (UFGHs) in Beijing and Shanghai by using data envelopment analysis (DEA) method, and to provide suggestions and discuss the evaluation of DEA method. Methods Four input indexes and 4 output indexes in 2009 of 12 UFGHs in Shanghai and 12 UFGHs in Beijing were collected. BCC model of DEA method was used to analyze the operational efficiency of these hospitals. Results The operational efficiency and ratio of efficiency of UFGHs in Beijing and Shanghai were higher than hospitals in other cities of China. Compared to Beijing, the overall efficiency, pure technical efficiency, and scale efficiency of UFGHs in Shanghai were higher, but there was no significant difference (P>0.05). In non-DEA effective hospitals in Shanghai, there was redundancy of open beds and fixed assets investment. There were significant differences in total employees and fixed assets investment of input and output indexes of UFGHs in both cities (P<0.01, P<0.05). Conclusion DEA is an effective method to evalute multiple inputs and outputs of hospitals and an assisted tool for hospital management and health decision making. The hospitals′ operational efficiency in Beijing and Shanghai are equivalent in high level. The way to increase hospitals′ operational efficiency is controlling scale and input, strengthening internal constructions, reducing operational costs, rationally allocating medical resources, and constantly improving the management level in refinement, specialization, and scientization.