Using a multilevel sample of 167 cities and 3529 individuals from China, the present dissertation investigates the roles of individual- and city-level factors in the three processes—social capital acquisition, activation and the returns to it—through which social capital (measured by the position generator methodology) affects status attainment. Based on the results from multilevel analyses, this research reaches the following conclusions: (1) Residents of a more developed city and a city with a high political ranking have more social capital. (2) Long-term and short-term mobility across cities enhance individuals' social capital. (3) Father's network extensity positively influences individuals' social capital, but this effect is reduced by economic development. (4) Being a supervisor increases the probability of social capital activation measured as receiving job information from network contacts. (5) People who live in a more developed city are more capable of activating their social capital. (6) Unemployment rate in a city increases social capital activation. (7) Social capital and its activation significantly affect current job status, and these effects are not contingent on the degree to which a labor market is restrained by bureaucratic regulations. Theses findings suggest a two-level social embeddedness. First, individuals' labor market actions and outcomes are embedded in the structures of social networks. Second, individuals' network relations and network behavior are embedded in the social structures at the macro level.