Islam has suggested the Muslims to implement Islamic economic system such as in business. One of the business activities that is now developing rapidly is Micro, Small and Medium Enterprises (SMEs). The manufacturing and trading sectors are the major products of Bantul Regency since most of Bantul people work in this sector. The manufacturing sector in Bantul has very high potential because it has many craft centers. It becomes the opportunity for Bantul regency to join the global market. In addition, the government highly supports the trading sector as a local economy empowerment since trading becomes the core of the economy in Bantul Regency. The more rapid modern market growth has threatened the existence of traditional markets.it is feared that the society will turn to the modern market. The aims of the research are to find out the development strategy of the SMEs in manufacturing and trading sectors and how the implementation in Islamic perspective is. This research was a field research. The data collection techniques applied interviews, observations, and documentation. The data collected was analyzed using SWOT (Strength, Weakness, Opportunities, Threat) that was further analyzed in accordance with the Islamic values. This research results in some development strategies of the SMEs in manucfaturing and trading sector that are as follow: Increasing the production and Innovation creativity based on the market demand (QS.At-Taubah:105, QS.Ra’du:11), Improving the product quality (QS.Mulk:2), Increasing the quality of human resources (QS.Al.Mujaadilah:11, QS.Ar-Rahman:33) Improving good working environment (QS.Al-Baqarah:188, QS.Al-Baqarah:148), and the strategies in trading sector such as: Preserving the existence of traditional market (QS.Al-Hasyr:7), Improving the infrastructure (QS,Ar-Ra’du 11), Increasing the quality of human resources (QS.Al.Mujaadilah:11,QS.Ar-Rahman:33), Changing mindset through traditional market promotion (QS.Al-Baqarah:198),and providing revolving fund program (QS.Al-Imran:130,QS.Al-Baqarah:278)