Abstract: The particularities of the defense industry makes its market——oriented reform different from that in other industries;therefore it is necessary to study the characteristics and the corresponding reform path of defense industry.Firstly,this article elaborates the achievements in reform of China's defense industry.Then it analyzes the four characteristics of the industry,that is,political function,purchaser'monopoly,high risk and secrecy.Finally,it raises several issues that should be paid attention to in future reform,namely the combination of safety and efficiency,support and competition,competition and cooperation and secrecy and impartiality.