This paper analyzes the dynamic process of the“regulation dilemma”of food safety proposed by re-cent studies through simulation modeling. The two-period game model includes the food producer,consumers, and regulators and analyzes the forming mechanism of the“regulation dilemma”. The result shows that the de-gree of regulation will influence the expected payoff of consumers and that the overall income in the food mar-ket will decrease when the regulation degree exceeds the consumers’expectation payoff so that the violation in-come will definitely increase. In return,the increase of violation income will enhance the violation motives.The result also suggests that the reason for the “regulation dilemma”is that the signal of the regulation power is skewed by the signal structures between regulators and enterprises and that between regulators and consum-ers. In other words,the regulation powers skew the consumer’s signal,so that consumers can not judge the quality of the signal by the market price,as decreases the payoff and market income. In the end,this paper suggests some institutional solutions.