The paper demonstrates the relationship between productive service industry and upgrading industrial structure and analyzes the interaction between productive service industry and manufacturing in Tianjin. Productive service industry, which developed from inside productive service sector of manufacturing industry, is characterized by high intelligence, high agglomeration and high employment. It is the core of modern service industry and the important driving force for manufacturing as well as the symbol reflecting the modernization of one nation or region. The experiences from developed countries show the interaction of interdependence and co-development between productive service and manufacturing industry. Manufacturing is the basis for the development of productive service industry. The more advanced the manufacturing is, the more the developed the productive service industry is. On the other hand, productive service industry will promote the upgrading of manufacturing and improve the competitiveness. To develop productive service industry and to integrate it and manufacturing is the pathway to adjust regional economic structure and to raise economic level. As Tianjin is positioned as the international port city and the northern economic center of China, it is vital to promote the development of productive service industry. Compared with Beijing, which has agglomeration advantage of productive service industry, Tianjin should strengthen its differentiated advantages and achieve staggered development and mutual complementation. Based on the current industrial situation in Tianjin, the paper expounds the “three steps” strategy for developing productive service industry and promoting the optimization and upgrading of industrial structure from the viewpoint of strategic plan, market level and industrial environment.