Drug-market of Anguo Town was originated in Song Dynasty. It had developed for more than 1000 years, and had never faded away at all. Why could it be developed all-along? There is much experience that can be made use of.This paper takes Drug-industry of Anguo Town as an example to analyze the reason for its development with reference to regional economy and culture.Anguo Town lies at the piedmont plain of the Taihang Mountains. Here the open land abounds with water resources, and the local soil and water conditions are favorable-for crude drug growth. This is why many good varieties of drugs were-first named "Qi" (Angou's old name ) in China. According to statistics, there are-more than 300 species of drugs, and the area for drugs is extensive, being about 20% of the total land area of the town. Drug-market was prosperous owing to the convenient water and land transportation.The temple setting up for a drug-god attracts numerous businessmen all over the country. The extensive drug trade has promoted. So "the temple" has become a center-place for exchanging drugs. Space attraction from "temple of drug-god" brings businessmen together, reduces exchange-cost due to shortening of distance from one place to another.The effects of the three machinisms of Exchange-cost, Network-management and Economic intergrowth, are reflected in the following aspects: 1) to cut down the exchange-cost by reducing relating layers; 2) to offer simple financial ways; and 3) to bring credit and professional personnel which is essential for market operations.Drugs' culture was exhibited by it's handicrafts. A famous saying-goes "there aren't flavor of a drug until it is sold at Qi" in China. Many drugs become even more effective after being technically processed in Anguo Town.In a word, space attraction from the Temple becomes a dependence of drug businessmen in the process of moving towards concentration; complete and orderly layer of exchange-network pledges normal operation of transactions; perfect financial system enables the benign circulation of drug market; credit and human-circumstances serve-as a huge umbrella to guarantee fastest and most reliable source of information; and as a kind of historical culture, it is easier to turn traditional crafts-into a one with distinct features in the process of regional and industrial development.