The study was conducted in Bukoba Municipality and Muleba Districts of Kagera region. The census aimed at analyzing the relationship between youth unemployment and industrialization. Tablets were used for data collection. Interview and documentary review were used to collect primary and secondary data. A total of 5,190 people related information were collected whereas 1,953(37.6%) were youth between 15-35; 1,936 (71.3%) of youth were not employed. About 879(43.1%) of youth were employed in agricultural sector. Private money lenders (48%) were main sources of capital in the area. Lack of capital, Business location, lack of fertilizer and lack of required education were challenges faced by youth in establishing business or finding jobs. About 410(48.01%) and 444(51.88%) were employed in formal and informal sector respectively. The study found that, self motivation (45.74%) for female and (40.96%) for male, availability of capital (7.18%) for female and 4.79% for male and required skills (1.06%) of male and (0.27%) of female) drove youth to be involved in business. The business included dress making, shoe making, restaurant, money lending, and retail shop. The activity which youth were performing falls in at least one of the three types of industry that is primary, secondary and tertiary industries. The study concludes that “industrialization can be a solution to youth unemployment” if youth are oriented and well prepared to take their appropriate position in the industrial sector. The study recommends that youth should be oriented on the stage of industrialization, and industrialization should be included in the education curriculum at all levels. Youth should be fully involved in youth’s employment strategies.