There is no real difference between the Kingdom of God and the Kingdom of Heaven. The two phrases are simply two different ways to indicate the same thing: a kingdom or system of government that is ruled by God. This power and authority to rule has been given to Jesus Christ by the Father, who is enthroned in Heaven. Christ is currently seated at the right hand of the Father. At a designated future time, the time of His second coming, Christ will then bring this rule to earth from Heaven. In this way the power and authority behind the reign of Christ can be said to be both “of God” and “of heaven.”
Why would Scripture use two different terms to say the same thing?
The phrase "Kingdom of Heaven" is only found in the gospel of Matthew. The other gospel writers stuck with the phrase "Kingdom of God." You can even compare parallel verses like Matthew 4:17 Matthew 4:17From that time Jesus began to preach, and to say, Repent: for the kingdom of heaven is at hand.
American King James Version×with Mark 1:15 Mark 1:15And saying, The time is fulfilled, and the kingdom of God is at hand: repent you, and believe the gospel.
American King James Version× or Matthew 5:3 Matthew 5:3Blessed are the poor in spirit: for theirs is the kingdom of heaven.
American King James Version×with Luke 6:20 Luke 6:20And he lifted up his eyes on his disciples, and said, Blessed be you poor: for yours is the kingdom of God.
American King James Version×, where Matthew uses the phrase "Kingdom of Heaven" while Mark and Luke use "Kingdom of God" in quoting Jesus during their individual accounts of the same events.
Matthew uses the phrase "Kingdom of Heaven" 32 times but he also uses the phrase "Kingdom of God" in some places. Did Matthew have a reason for this swapping of phrases, or was he just less consistent than the other writers?
Each of the gospel writers were inspired to create a unique version of Jesus’ life and teachings that viewed the same events from a slightly different angle. Matthew’s work was written for a primarily Jewish audience who were familiar with the Scriptures. This Jewish audience already understood the concept of a Kingdom of God based on their knowledge of the writings of the prophets. The prophets don’t use the phrase Kingdom of Heaven or Kingdom of God in the Old Testament, but the idea was strongly represented in those sections of Scripture.
One such example is from the writings of Daniel in chapter 2, where this kingdom is represented by a stone from heaven that comes down and smashes the kingdoms of this world, then grows to fill the whole Earth. Jewish teachers of that time used a short Hebrew phrase to quickly convey this larger concept: Makur Shamayim, meaning Kingdom of Heaven (jewishencyclopedia.com/articles/9328-kingdom-of-god).
Daniel’s prophecy is now understood to refer to the time when Christ will return to rule with the power and authority given to Him by the Father. He will come from heaven to earth. In Matthew’s day using the phrase Kingdom of Heaven would help Jewish-thinking people to more quickly see the consistency between what Jesus taught and the prophets of old. Jesus Himself may also have used both phrases interchangeably to create the same connection depending on who He was addressing at the moment.
Does the phrase "Kingdom of Heaven" refer to heaven in the traditional sense?
No, Matthew’s use of the phrase Kingdom of Heaven is meant as an indication of where the power and authority of this kingdom will come from. The kingdom ruled by Christ will come to earth from heaven with the power and the authority of God.
Here are a few key scriptural references related to Christ’s return to rule on earth:
Revelation 11:15 Revelation 11:15And the seventh angel sounded; and there were great voices in heaven, saying, The kingdoms of this world are become the kingdoms of our Lord, and of his Christ; and he shall reign for ever and ever.
American King James Version×—At His coming Christ will take over the governments and authorities of earth.
Revelation 19:11-15 Revelation 19:11-15  And I saw heaven opened, and behold a white horse; and he that sat on him was called Faithful and True, and in righteousness he does judge and make war.
 His eyes were as a flame of fire, and on his head were many crowns; and he had a name written, that no man knew, but he himself.
 And he was clothed with a clothing dipped in blood: and his name is called The Word of God.
 And the armies which were in heaven followed him on white horses, clothed in fine linen, white and clean.
 And out of his mouth goes a sharp sword, that with it he should smite the nations: and he shall rule them with a rod of iron: and he treads the wine press of the fierceness and wrath of Almighty God.
American King James Version×—Christ will come from heaven to rule the nations of the earth.
1 Corinthians 15:22-26 1 Corinthians 15:22-26  For as in Adam all die, even so in Christ shall all be made alive.
 But every man in his own order: Christ the first fruits; afterward they that are Christ's at his coming.
 Then comes the end, when he shall have delivered up the kingdom to God, even the Father; when he shall have put down all rule and all authority and power.
 For he must reign, till he has put all enemies under his feet.
 The last enemy that shall be destroyed is death.
American King James Version×—Christ will rule until He completes the task of putting all things under the rule of God. After which He hands over the kingdom to the Father.
Revelation 21:1-4 Revelation 21:1-4  And I saw a new heaven and a new earth: for the first heaven and the first earth were passed away; and there was no more sea.
 And I John saw the holy city, new Jerusalem, coming down from God out of heaven, prepared as a bride adorned for her husband.
 And I heard a great voice out of heaven saying, Behold, the tabernacle of God is with men, and he will dwell with them, and they shall be his people, and God himself shall be with them, and be their God.
 And God shall wipe away all tears from their eyes; and there shall be no more death, neither sorrow, nor crying, neither shall there be any more pain: for the former things are passed away.
American King James Version×—When all this has been accomplished even the dwelling place of God will move from heaven to earth.
For a more in-depth look at the scriptural teaching on the Kingdom of God read our other free Bible study guide: The Gospel of the Kingdom.
For a better understanding of the biblical teaching versus the “traditional” teaching on heaven you should take a look our free bible study guide: What Happens After Death?