: In VLSI circuits with deep sub-micron, the parasitic capacitance from interconnect is a very important factor determining circuit performances such as power and time-delay. The Boundary Element Method(BEM) is an effective tool for solving Laplacian’s equation applied in the parasitic capacitance extraction. In this paper, a hierarchical h-adaptive BEM is presented . It constructs a 3-D linear hierarchical shape function based on constant boundary element and uses previous computations and solutions. Hence, it reduces much computation in adaptive procedure. Besides, a combination of residualtype estimator and reduced Z-Z error estimator for more reliable and efficient estimation of error is presented. Some numerical results show that this method is effective. Key words: Parasitic Capacitance, Boundary Element Method, Hierarchical h-Adaptive Computation, VLSI