The steam flooding is one common way used to enhance oil recovery of heavy oil reservoir. It is difficult to use conventional treatment on steam flooding analysis because of numerous effective factors, complex relationships and no certain mapping relation among those factors. This paper applies grey relationship method to analyze correlative degree of the factors which effect on steam flooding, and then selects steam absorption effect as the comparative indicator, finally gets a sort of steam flooding effect of different parameters. Each correlation degree has a good match with steam flooding effect, and the higher of correlation degree the better of steam flooding effect. Grey relationship is an effective, fast and accurate method for appraising steam flooding effect.