Industrial innovation network is composed of innovation orientated firms and relationships among them. Studying the evolution mechanism of industrial innovation network is of great importance. However,there are few research achievements in this field,especially the quantitative ones. Based on social network theory,the paper describes the industrial innovation network as network of innovation oriented firms,with knowledge network and social network as the basis of network innovation,and the entry and exit of firms together with firms' decision making forming the evolution of industrial innovation network. Multi-agent simulation model based on the above hypotheses is built to analyze the evolution mechanism of industrial innovation networks. The evolution of the third generation mobile communications( 3 G) industry based on TD-SCDMA technical standard in China shows that the simulation model can to some extent reflect the characteristics of the evolution mechanism of industrial innovation networks,and that simulation is an effective method for interpreting the evolution mechanism of industrial innovation networks.