A new framework of electromagnetic theory is presented on the basis of conservation principles of energy and momentum. First, Maxwell's equations and Lorentz force law in vacuum are derived as theorems from the conservation principles. Next, new kinds of averaging procedure, transversal and longitudinal, are introduced to deal with the macroscopic media. Electromagnetic field (E, H) and flux density (D, B) are defined as the longitudinal and transversal averages of the corresponding microscopic field. The polarization P and magnetization M defined as P = D-epsilon(0) E, M = B-mu(0) H are given explicit expressions in terms of microscopic electromagnetic structure of the matter. Lorentz transformation of space-time and electromagnetic field can be derived entirely within the framework of electromagnetic theory.