Abstract: The development of dairy industry in China is very rapid, which obtains great benefits.But there still are many problems in this area. So it is necessary to study and analyse the characteristics of dairy industry and its regional increase. In this paper, with the reference of national dairy product industry statistics and the panel data from the dairy product, and industry of different provinces, the features of dairy product industry development in China and its regional characteristics were studied through the estimation by the production function and the analysis on the industry performance. The analysis results showed that the dairy product industry in China has the characteristics of explicit increasing returns to scale. The industry integration and optimation of industry structure play a very extraordinary promotion role in improving the industry performance. Among the factors affecting the industry development, the contribution ratio of technology and advance taepes a very important role.