A method of providing a service menu and a service in a network environment and a service providing apparatus thereof are provided. The method includes evaluating a context on a current situation of an electronic, and creating and displaying a user menu on which information on external service providing apparatuses associated with the evaluated context is enumerated. The list of the service functions required according to the condition of the user and the context is provided, and the service function desired by the user is automatically executed, thereby improving the user convenience.