As China’s urbanization has developed so far，numerous small towns nowadays are featured with industrial characteristics，achieve a certain scale，and incorporate some auxiliary functions of metropolitan cities. The growth of these small towns，however，is faced with problems of transformation and upgrading to metropolis and how to adjust and keep a balance between its industrial development trend and the position of overall function. The sustainable growth of these small towns lies in how to choose between opportunities and challenges brought by environmental changes. Hongge town，Yanbian county of Panzhihua poses a typical instance in facing positioning and balancing of diversified industrial growth during the process of its urbanization. Through combing the mode，experience and problems of Hongge’s urbanization development，this thesis attempts to provide some valuable advice to distinctive small towns with diversified industrial development in aspects such as industry assessment，management system innovation and town-level financial system innovation.