The purpose of this study is to apply the theory of industrial organization to examine the industry characteristics and businese conduct of Taiwan man- made fiber industry. How market structure and market conduct affecting the market processes as well as operational performance under the operations of man-made fiber industry are main issues in this study. The procedure of this analysis involves three steps: 1.Identifying market characteristics of the industry by using the index of market share, concentration ratio, product differentiation and etc, 2.Discussions of market conduct variables including pricing, marketing channel decision-making, the behaviors of advertising and technological innovation, 3.Analyzing the arket performance on this industry. The analytical results have indicated that the market power or market imperfection world affect not only the behaviors of competing firms but also the performance of the entire market. Therefore, to achieve the effective competition and to improve, it first need adjustments of business management strategies, otherwise, government policies should be involved.