In order to study the development policy of prefabricated building industry more scientifically, from the perspective of industrial chain development, the prefabricated building industrial chain development system dynamics model was established, and four typical policy variables were selected for simulation. The results show that: the increase of industrial chain capital input and the improvement of prefabricated assembly rate of government-invested construction projects are short-term strong and effective incentive policies; enterprise tax incentives and prefabricated building purchase loan incentives are long-term incentive policies. Combined with the simulation results, the policy formulation suggestions based on the development trend of the industrial chain are put forward.