This paper investigates the effect of rural reform on the formation of early conditions for industrialization in Vietnam under the view that agrarian transition is a critical factor in determining the industrialization path when a society transforms into a capitalist industrial society. This article analyzes agriculture productivity, land distribution policy, and price policies from 1988 to 1995 in Vietnam to explore whether Vietnam's reform increased rural households' income and created the possibility of capital accumulation in rural areas. First, it is clear that agricultural production in Vietnam has increased due to the rural reform, but it was not dramatic. Above all, the production capacity of rural households did not increase compared to the increase in agricultural production across the country. Second, the land distribution policy was in a way that was remarkably equal for each household. As a result, land distribution limited the production capacity of rural households and increased the rate of incomplete employment in rural areas. Third, the price policy did not improve the terms-of-trade of rural households, and rural families could not experience a rapid increase in income through agriculture in the early stages of reform. In conclusion, the early rural reform in Vietnam did not increase rural families' income enough to change the rural economy because reform policies restricted the improvement of rural households' economy. Vietnam's early reforms did not achieve capital accumulation in agriculture but a labor force with land use rights in rural areas, which would define the pattern of industrialization in Vietnam henceforth.