Abstract: According to the analysis of basic trend and future tendency of mutton price in recent 3years in Shandong Province, reasons of mutton price rising have been discussed, including issues of weak industry foundation, low degree of improved variety system, defective disease prevention and control system, low level of scale and systematization, and withdrawal of scatter-feed households. Which leads to either the condition of less stock and low slaughtering rate of mutton sheep in Shandong Province, or the situation of obvious contradiction in mutton supply and demand, and continual price increasing. Strategic suggestions have been proposed, such as building and improving systems on fine variety breeding, disease prevention and control, and technology extension, strengthening standardized scale breeding, industry chain construction, and policy supports, and finally achieving larger and stronger mutton sheep industry in Shandong Province.