This paper examines the micro-foundations of industrial agglomeration of manufacturing industries in Beijing using data from the first economic census conducted in 2004.The traditional resource based industries are highly ag- glomerated while both labor and capital-technology intensive could be fairly dispersed.There is also a trend of subur- banization of manufacturing industries in Beijing.Statistical analysis highlights the significant role of labor composition and urban structure in industrial agglomeration.Due to the integrated labor market,high quality labor has indeed driven the industrial agglomeration of industries while industrial suburbanization has encouraged the dispersion of industries in Beijing.Scale economies lead to more agglomeration while local industrial and investment policies may result in less ag- glomeration.