The institutional environment which impact the development of industrial cluster in Wuhan urban agglomeration is including the formal and informal institutional environment. The industrial cluster in Wuhan city circle has the obvious characteristics in such as areal distribution，industrial distribution and development models，and there are many problems such as still insufficient level of development，need to improve the institutional environment，and control ecological environmental protection，we should start with management cluster，foster the cluster innovation capacity，build Cluster brands and development of circular economy to promotion of sustained activity and make the healthy development of industrial clusters.