Analysis of energy consumption in different sectors is an important point in energy planning. A recently widely used technique with relatively high capability in field of industrial energy demand modeling is the decomposition analysis. The paper uses this technique to analyze industrial energy consumption of Iran in 2001-2005. Results of the paper show that the production effect was the main factor in variations of industrial energy consumption in this period, and the energy intensity and structural effects placed on the further steps. Furthermore, the energy intensity effect had more effect on the industrial energy conservation than the structural effect.