Abstract: Property Relations, which have a great influence on the development of enterprises (including small and medium-sized enterprises), are subject to many economic constraints. In western countries, it has been proven that MBO can greatly improve the competition ability of the SME (small and medium-sized enterprises). In China, MBO can also be applied in a lot of places and has a bright future. This paper firstly analyses the advantages and disadvantages of the application of MBO in SME, and then clarifies its value of application; and finally for dealing with the priorities and the difficulties in MBO application, it proposes some solutions to promote the further application and development of MBO in Property Rights Reconstruction of SME.