Abstract: Sugar Industry in Yunnan, after years of development, has already become the second largest agricultural product processing industry after tobacco. Yunnan has become the second-largest sugar-producing province in China. The development of sugar industry concerns the benefits of 6,000,000 farmers in Yunnan province. Development of sugar industry is one of the effective ways to solve the problems about agriculture, countryside and peasantry in Yunnan province. Although sugar industry in Yunnan has made great achievements, several problems still exist, such as lack of labour resource for sugarcane cultivation, research and promotion lag of the fine varieties, the raw materials can not meet the need of sugar producing, the low level of producing scale, the small scale management of sugar enterprises, and the technical equipment need to be improved. In the new situation of the strategy of building Yunnan into a gateway in China’s opening up to the Southwest, sugar industry in Yunnan should make full use of its own advantages, seize the opportunity, and the government should give more support to sugar industry, implement the industrialization of sugarcane planting, scale management, and structure adjustment, attach importance to scientific and technological innovation, and strengthen the construction of talent team to promote the healthy development of sugar industry in Yunnan province.