Modern aquaculture seed industry is the foundation and the core competitiveness for the green and high-quality development of aquaculture. To fully study the problems faced by the industry and to explore its development path are of a great significance to the modernization of aquaculture seed industry. Based on reviewing the development history of China’s aquaculture seed industry, the national development strategies of the seed industry, and the connotation of the modern aquaculture seed industry, this paper analyzed the development focus, the existing foundation, advantages, and problems, and the institutional and management gaps of the industry and proposed some innovative development paths for China’s aquaculture seed industry. Results showed that China’s aquaculture seed industry is large, but overall, it is still in the initial developing stage. China is rich in aquatic germplasm resources and the germplasm resource protection system, the production system of the original and improved varieties, the breeding technical system, and the regulatory management system have been initially established. However, there are still existing some problems, including weak protection on germplasm resources, insufficiently integrated application of advanced technology, and low level of research on new varieties. Additional challenges include: the commercial operation system with large seed enterprises not being well established, insufficient supporting policies, and weak market management system. Regarding the management, germplasm resource management institutions and functions are not sound, and the protection-related legislatives and management regulations are lagging. In addition, new variety certification and intellectual property protection laws are not complete, the joint breeding research and new variety commercialization mechanism are not well established, and the industry entry threshold is low with insufficient production standardization. To build an market-oriented, enterprise-based, industry-university-research collaborative, and innovative system for China’s aquaculture seed industry, this paper provides the following suggestions: 1) strengthening the national aquatic germplasm resource protection agencies and their functions; 2) improving the management methods for germplasm resources and regulations on new varieties’ approval and property right protection; 3) supporting the high-quality aquaculture seed enterprises with improved government support system, higher industry entry threshold, attractive flow mechanism for professional talents, and strict licensing system of aquatic seed production; and 4) actively promoting the use of digital and smart technologies.