Abstract Japan's limited surface space and skyrocketing land prices have made the development of underground space an attractive solution to the problems of surface overcrowding and pollution. The discovery of the “new frontier” of deep underground space has been triggered by three main factors: the existence of need, improved technology, and available financing. The author discusses recent tunnelling techniques—such as slurry walls, shield tunnelling, the New Austrian Tunnelling Method, and large-scale underpinning —that have been developed in Japan for building in difficult soils. These advances, combined with major breakthroughs in the use of computer analysis and highly developed underground sensor instrumentation, have played a major role in creating a future for deep underground construction in Japan. The author discusses the Japanese goverment's recent plan to develop new guidelines for the public use of underground space. The Ministry of International Trade and Industry (MITI) has been charged with developing a master plan for large-scale industrial technology, aimed at the development of deep underground space (i.e., 50 m or more below-ground). The authors describe both the governmental program and conceptual studies of deep underground space use done by the private construction industry. Japan has yet to resolve a number of legal, technological and economic issues related to underground space development; these potential obstacles to such development are discussed.