Users often use tags to annotate and categorize web content. A folksonomy is a system of classification derived from the practice and method of collaboratively creating and managing tags. The most significant feature of a folksonomy is that it directly reflects the vocabulary of users. This feature is very useful in tag-based content searching and user browsing. Based on mutual-overlapping measurement of tag's instance sets, an ontology learning algorithm to construct concept hierarchy from folksonomy is proposed. A case study of datasets from a famous Chinese e-business website taobao is carried out. The precision, valid, recall and F-measure rates of the constructed concept hierarchy are 54%, 84%, 100% and 70% respectively. The experimental results on real world datasets show that the proposed method is feasible.