The assessment of the interaction between a new tunnel and existing residential or office building is an important issue in urban area. In this study, special protection design for existing structures is introduced based on an actual engineering project of urban tunnel closely passing beneath an existing residential building. Cavern-pile construction method and deep grouting technique with ultra-advanced steel pipe are used in this project to efficiently control the settlement of the stratums on top of tunnel. Additionally, the effect of tunneling on the existing residential building is investigated through finite element calculations. The load condition, deformation and stability of the tunnel elements beneath building are also analyzed. Then, on the basis of calculated results, it is concluded that the new tunnel constructed by cavern-pile method causes small ground settlement, therefore it does not considerably affects the existing building. The safety of resident is guaranteed.