Land market has grown to be among the key mechanisms to acquire land for industrialization. This is because; in a well functioning land market, it allocates land to investors timely. This paper assesses the opportunities and challenges of land market for industrial development in Tanzania. Specifically, it analyzes the implications of the current land market practices on industrialization process in Iwambi, Ilemi, Tembela and Uyole Wards. A sample of 387 respondents drawn from earlier mentioned Wards was engaged in questionnaire’s survey. Other methods for data collection were Focus Group Discussion (FGDs), and interviews which were used to enhance the analysis through data gathered from other sources. As an opportunity for industrialization, land market attracts investors as it provides a simplified and timely means of acquiring land, can increase incentive for industrialization since land is used as factor of production and can be used as collateral for credit acquisition. Notwithstanding these opportunities; the nature and characteristics of urban land market in Tanzania relinquish industrialization efforts. There is dominance of informality in land transactions, unclear pricing and land ownership, limited surveyed land, and records on land value. Other challenges are; high registration transaction costs, untimely services, and too bureaucratic procedures. All these have even contributed to conversion of industrial areas into residential areas in peri-urban areas. Remote Sensing and Geographical Information System results illustrate that between 2005 and 2015, in Uyole Ward, 8.42% of industrial areas and in Ilemi Ward, 0.2% was converted into unplanned residential areas. This conversion reduces the industrial areas and affects industrialization. The conclusion is therefore drawn that unless the challenges characterizing land market are addressed, Tanzania industrialization will remain costly and risks.