Based on theory of “Smile Curve”, this paper analyzes industrial composition and current development situation of Xinjiang forestry and fruit industry. The “Smile Curve” theory indicates that research development and marketing sections have advantages of high added value, while processing and manufacturing sections have lower profitability. In line with these situations, strategic countermeasures are put forward for improving competitive power and increasing values of Xinjiang forestry and fruit industry. Countermeasures include seeking balance of ecological, social and economic benefits, and guiding investment in science and technology; energetically developing refined and deep processing through building industrial bases by leading enterprises; energetically developing informationization and logistics construction and catching major points of forestry and fruit industrial construction; stressing regional characteristics and implementing independent brand strategy from the “Green” concept.