Abstract: The upgrading of industrial structure is a very important problem in economic development of China. With hastening the progress of 'marketization' (general adoption of the market priniciples) and globalization, the upgrading of industrial structure of China will be in a special circumstance. It is of very important significance to research the different functions of government, market and enterprise in the process. On the basis of theoretical and practical analysis, this paper presents the model of adjustment of industrial structure with government as the guide, market as the basis and enterprise as the subject.