The paper stresses on understanding factors affecting development of citrus industry in Tanzania particularly in Muheza District, in Tanga region. Citrus fruit is one of the most important crops in Muheza District of Tanga region in Tanzania particularly in improving rural farmers’ income. The study employed institutional framework methodology. The study disclosed that the government of Tanzania has been implementing various agricultural development programmes in improving citrus fruit production as well as to enhance farmers’ income. However, yet the results reveal that the citrus farming practices in the surveyed area are not well developed. And these are because citruses are still grown under rain fed regime without any form of irrigation, citrus seedlings are produced by individual farmers locally in their backyard nurseries. There is no professional company responsible for seedling production. Also, citrus farmers’ skills in citrus husbandry practices are limited. Lastly, all citrus varieties used contain many seeds in the citrus fruits whereas the market demands seedless citrus fruits. It is therefore, recommended that the policy maker should focus on development of citrus industry in Tanzania using proper institutional framework support, which could increase growth and development of citrus production through the provision of subsides for inputs to reduce cost of production and enlightenment campaigns to improve farmer’s knowledge and technical skills on how to reach lucrative markets.