Technology of IOT which used in agricultural supply chain can help to improve operational efficiency and reduce supply chain costs. This paper analyzes the basic structure of agricultural supply chain, current status of the research, and summarizes major obstacles of the development process. The paper also describes application of IOT principle, as well as agricultural supply chain optimization approach based on internet of things, including agricultural production, processing, transportation and sales process. The results show that: integration and information management through IOT can reduce logistics costs and improve circulation efficiency and effectiveness. The government should develop policies to achieve agricultural internet of things, improve efficiency of agricultural supply chain operations.