To analyze the military equipment development policy, the optimization model of system dynamics for military equipment development policy was set up. The military equipment development policy system is analyzed qualitatively and quantitatively, and the interrelation of influence factor in the system was discussed. According to the diagram and flow chart of the military equipment development policy system, different simulation results were received by changing different external variables. And simulation results verified the validity of the method, which provided an availability decision-making sustain for military equipment development policy.