The present invention provides an IP address assignment apparatus and method. A packet data gateway receives a connection establishment request that is sent by a mobility management network element and that carries user location information, assigns an IP address to the terminal according to a correspondence between the user location information and an IP address pool, and feeds back the IP address to the mobility management network element. In the present invention, effects that the packet data gateway can assign an IP address according to a location of a terminal, and different IP addresses are assigned at different regions are achieved.