This paper presents a diagnostic study of typhoon over the South China Sea in the early summer by using the kinetic energy budget equations in a quasi-Lagrangian coordinate frame with the major results as follows: 1) The kinetic energy due to the cumulus cloud convection is the main source of energy for typhoon, which intensifies when the kinetic energy from the internal source is greater than the dissipation energy from the external source, and vice versa. 2) The effect of the baratropic energy conversion is very small, whereas the energy due to the baraclinic energy conversion is quite important. 3) The interaction between the typhoon over the South China Sea and the environment is considerable. The typhoon transports enormous quantities of kinetic energy to the environment. This process is accomplished main in the mid—upper troposphere. 4) So far as the energy budget is concerned, the CISK mechanism plays an important part in the development of typhoon over the South China Sea.