In this study, we investigate the metal-insulator transition of charge transfer type in high-temperature cuprates. We first show that we must introduce a new band parameter in the three-band d-p model to reproduce the Fermi surface of high temperature cuprates such as BSCCO, YBCO and Hg1201. We present a new wave function of a Mott insulator based on the improved Gutzwiller function, and show that there is a transition from a metal to a charge-transfer insulator for such parameters by using the variational Monte Carlo method. This transition occurs when the level difference Δdp≡ϵp−ϵd between d and p orbitals reaches a critical value (Δdp)c. The energy gain ΔE, measured from the limit of large Δdp, is proportional to 1/Δdp for Δdp>(Δdp)c: ΔE∝−tdp2/Δdp. We obtain (Δdp)c≃2tdp using the realistic band parameters.