The purpose of this paper is to clarify the distribution of industry and its recent change in Osaka area by the use of grid method Since 1960s the national share of metropolitan areas in manufacturing industry has decreased, especially in Osaka area. The distribution area of factories in the area were limited in Osaka city and its adjacent areas in 1965. Since then the share of Osaka city in the area has declined and the factories expanded to the surrounding areas except southern suburbs. In comparison with Tokyo area, areal differentiation by the type of industry is not so clear and there are only a few districts specialized in publishing and printing industry. The fact that the decline of the national share of Osaka area is more serious than Tokyo area is mainly caused by the inactivity of machinery industry.