The purpose of this study is to clarify the reason of the change of production-and-marketing system and of the regional division. The data for this study were collected by administering interviews with people engaging in hemp fabric industry: namely, craftsmen and managers in the production and marketing of "hemp fabric" handcraft. The summary of this study is as follows: First, the hemp fabric industry is a main subsidiary business of agriculture in Andong. The process of making hemp fabric heavily depends on manual labor. The process is divided into five stages: namely, cultivating hemp, pre-reeling, reeling, weaving, and colouring. Second, Andong "hemp fabric" handicrafts industry had been continuously growth until the late 1960s. During the period of Japan colonization, it was under boom condition: while the other traditional fabric industries were declined. In the 1970s, the decrease of the demand of hemp fabric was the result of mass production of substitute goods on factory system: while, in the 1980s, the growth of per capital income play an important role in bringing about the increased demand of hemp fabric. Third, in the 1980s. production-and-marketing system was changed as the result of the effort to improve the quality and the process, the advanced age of craftsmen, and the weak function of existing marketing systems. The social division of labor within the district is well developed between cultivating hemp, reeling and weaving. The social division of labor is also found in the partly process of handcratfs, and between the production and marketing. The social division of labor between production and marketing is not strongly developed to establish a reliable enterprise that develops a new product and opens a new market. Fourth, the spatial boundary of the production of hemp fabric handcrafts becomes limited into a special region based on the regional specialization of hemp cultivating and the differentiation of utilization of labor.