An important issue affecting state security and economic prosperity is industrial transformation of the old industrial city in China’s regional economy, yet it still remains uncompletely resolved. Here we investigated the changes in the interaction of industrial transformation and employment in the old industrial city. There are three critical regional features on the changes. Namely, most of the old industrial cities rely heavily on resources-intensive industries and traditional manufacturing industries. Affected by industrial transformation, the workforce allocation of various industries is changing, which is going step further to make a difference on industrial-occupational employment structure. Generally, with the hard condition of layoff and unemployment, it is required to resolve the employment and re-employed problem for the old industrial city, so there are some changes of employment policies and employment institutions during industrial transformation. In addition, regarding the large state-own enterprises (SOEs) as the main part in the old industrial city, the behavior and idea of employee are strongly subject to the restrictions of the unit of enterprise. With accelerating industrial transformation, the employment cultures transfer from conservative culture to enterprise culture, from industrial culture to commercial culture. As a typical old industrial city in China, Shenyang's industrial transformation is a representative one. Shenyang preferentially constructed in the early times of the P.R. China, which has put an emphasis on the development of the secondary industry in terms of economic structure. Moreover, it has been suggested that its employment structure focuses on the secondary industry. With the reform of enterprises deepened constantly, such industries established in the planned economy mode, especially state-owned enterprises (SOEs), have brought a series of problems, such as increased unemployment rates and laid-off employee. Shenyang has thus become one of the major cities in china, with severe employment problems. Based on those cases, this paper explores industrial transformation of Shenyang from perspective of industrial upgrading, industrial replacement and industrial convergence. Then, it analyses employment effect on industrial transformation, which include the change of employment structures, institutions and cultures. The results indicate that there are still structural contradictions of employment and re-employment, though Shenyang has reformed on the state-owned enterprises and urban economy from the mid-1990s. Finally, we discuss the countermeasures of employment enhancement during revitalizing the old industrial base in Northeast China, developing port cities, constructing the new northern developing area and the western industrial corridor of Shenyang, which involve in developing the tertiary industry and diverse nonpublic ownership economies, increasing labor-intensive industries and small and medium-sized enterprises, accelerating reformation of the state-owned enterprises and perfecting the social security system, etc.