Abstract: In the context of industrialization and the flow of productive factors, China’s dairy industry is undergoing a significant regional structural change from resource-intensive regions to capital-intensive regions. By reviewing China’s dairy industry development history over the past two decades, this paper summarizes the temporal and spatialevolutions of the regional distribution in China’s dairy industry. Applying the theories of both economic geography andnew economic geography, this paper also constructs a four-dimensional conceptual framework, including resources, capital, market potential, and policy factors, to examine the impact of the above four factors upon the spatial allocation of milk production in China using a state-level panel data from 2002 to 2012. Results indicate that: 1) the dairy industry shares in the Northeast, Northwest, Metropolitan areas was decreasing and the dairy industry shares in the South China were increasing; 2) the output values of dairy enterprises and the state-level soybean output have positive impacts on the growth of regional dairy cow inventories; 3) dairy superior region’s policy favored the increase of dairy cow inventories; 4) the per cow productivity, however, has negative influence on region’s dairy cow inventories; and 5) statelevel consumption of dairy products and the lag of cow inventory show insignificant influences on the specialization of milk production in regions.