Abstract. This article is devoted to the development of military-industrial complex of Ukraine since 1991. As a result of the collapse of the Soviet Union about 25% of the Soviet state production capacity remained on the territory of Ukraine. Since Ukraine gained independence a rapid decline in military production took place for several years. The Ukrainian military-industrial complex practically did not form closed production cycles and was strongly dependent on cooperation ties with Russia. Until 2014 the military industry survived mainly due to export contracts, as national defense orders were extremely small. An outbreak of the civil war in the South-East of the country could not completely reverse this trend. On the one hand the military-industrial complex needs to respond to Ukraine`s Armed Force requirements. However, the situation objectively formed in the world arms market creates other contradicting demands to the defense industry.