Seeds are the core carrier of agricultural scientific and technological progress, and they are also the foundation for ensuring national food security and building a strong agricultural country. Establishing a commercial breeding system, as one of the core goals of modern seed industry development, is a key measure to lay a solid foundation for the seed industry vitalization. Through field research and literature analysis, the study systematically reviews the current development status of the crop seed industry in Shandong Province. With the goal of establishing a commercial breeding system, we deeply analyze the existing problems and propose targeted suggestions. Research indicates that the development of seed industry in Shandong Province has achieved remarkable results. The dominant position of enterprises in innovation has gradually increased, and the breeding ability of some crop varieties has reached the leading level in China. However, at the same time, issues such as the low level of scale and organization of breeding and the imperfect commercialized breeding system still restrict the improvement of breeding innovation efficiency and market competitiveness. Therefore, the study proposes a construction model and countermeasures for the breeding system in Shandong Province from the aspects of technological innovation, industrial integration, talent cultivation, and market environment, by comparing and analyzing the commercialized breeding systems of developed countries in Europe and America. This provides a reference and basis for government decision-making and business practice, and also offers insights for seed industry innovation in other regions of China.