Dairy industry is one of the most important loop of agricultural food chain and agroindustry that has first rank in market and added value among the other agricultural industries. Studies have shown that insufficient attention to regional differences in dairy industry management and policy making leads to inefficient development policies for this industry in Iran provinces. Therefore, the purpose of this study was to explain the current situation of dairy industry and ranking Iran provinces in terms of dairy industry development indices by numerical taxonomy technique. These indices were determined using dairy expert views and reviewing of formal statistics about Iran dairy industry that include: the number of milk livestock, amount of raw milk production, milk price in the market, the number of active milk processing units, the total production of liquid milk, yogurt, cheese, Doogh and ice cream. Based on the results, in this time period (from 2002 until 2012), there is a lack of progress in some indices in Iran dairy industry. Also, Razavi Khorasan and Ilam provinces had the highest and lowest levels of Iran’s dairy industry development respectively. Thus, this study recommended that take attention to provincial differences as well as the ranking of them according to their potential in each of these indices are necessary for decision making and planning for development, investment and management of dairy industry.