It is globally accepted that industrialization is a key way to economic growth for any country. Rural industrialization has been a vehicle for rural development and eventually positive broad change in macro economic variables of any country. This being the case, Rural Industrialization by using Public and Private Partnership (PPP) model has been very common in numerous countries. Tanzania as one of developing countries in its vision 2025 has aimed to bring industrial transformation that will lead a country to become a semi industrialized and therefore the middle income country by 2025. However, how Tanzania has incorporated PPP in rural industrialization, the challenges and prospects for industrialization are not clear. Therefore, through Literature review, this paper is an effort to contribute in address these issues. Specifically the paper focus on documenting the status of Rural Industrialization by using PPP Model in Tanzania, identifying the challenges encountered in rural industrialization using PPP Model, and forecasting the future of the Rural industrialization basing on PPP Model in Tanzania. Some of the findings suggest that, while rural industrialization based on PPP in Tanzania is envisaged, Tanzania is achieving industrial development with poor rural industrialization. This is evident through low structural change and export of agro processed products. However, the future is bright, since the strategic use of available natural resources, availability of Special Economic Zones (SEZs), private sector, programmes and institutions that can revolve their works around Rural industrialization such as SIDO, CARMATEC, and REA can reverse the situation. Inter alia, the study recommends for establishment of coherent institutional framework to enhance synergies among key stakeholders in Rural industrialization with the introduction of the specific body to enhance availability of Rural industrialization researches and information.