Product family management is a key support technology to implement mass customized production. Various products in product family are similar in functional characters, physical characters and technological characters, which is an important character of product family. Based on the products represents and mapping relations in functional domain and physical domain, a method of classifying product family is presented by comparing similarity of both functional requirements in functional domain and design parameters in physical domain. The process of classifying product family by virtue of this method is also discussed. At last, a case is introduced to illustrate the application of this method.