Abstract: Based on the data from 2008 to 2014, and applying the concepts of the barriers to entry, the market main body composition, the profit ratio, the economy of scale, the capacity utilization rate, the R&D innovation ability, the total factor productivity, and the correlation coefficient, this paper analyzed the market structure change and the industry development performance of China’s grain processing industry and their relationship. Results show that: 1) under the background of market-oriented reform and foreign capital’s entry, the barriers to entry have experienced a change from decreasing to increasing. The market share of state owned enterprises and foreign-invested enterprises tended to decline while the market share of private enterprises increased gradually; 2) although the industry development performance of China’s grain processing industry was improving gradually, the overall level was low; and 3) the optimization of the market structure has improved the industry development performance of the grain processing industry and imposed some negative effects at the same time. Based on above analysis results, this paper provides the following suggestions: continuing to promote market-oriented reform of the grain processing industry, promoting the integration and reorganization of China’s grain processing industry, and increasing large-scale grain enterprises’ innovation and R