This chapter provides a systematic review of the reform of state-owned enterprises and its experience. The reform of state-owned enterprises in China can be divided into 3 stages：preliminary exploration，institutional innovation and in-depth progress. It is a process of “crossing the river by feeling out underwater rocks”，i.e.，try and error. It is also a combined product of the promoting from the central government and the practice of the local government. It is in essence the interaction between the productive forces and the relations of production，which is in accordance with the objective needs of constructing socialist market economy. But the reform of state-owned enterprises is still facing many problems，which need solving through further reform. The future reform of state-owned enterprises will focus on readjusting strategic arrangement，deepening reform of shareholding system，improving corporate governance structure，and bettering the state assets management system and leadership in state-owned enterprises.