The main aim of this research was to identify effective components on policymaking based on the market-place in Iran's higher education. The research methodology was qualitative and Grounded Theory, and the data gathering tool was a semi-structured interview. The sampling method was purposive and 40 researchers and specialists of  technology, research and sciences ministry and universities of Hamedan, Kurdistan, and Sistan and Baluchestan provinces were selected for interviews. The data was analyzed by using themes analysis in the forms of Open, Axial and Selective coding. Policymaking based on market-place in higher education at two dimensions of horizontal and vertical was the central hypothesis of the research. The vertical policymaking based on market-place includes: labor culture-making, modifying the structure of universities and market, need-assessment based on market- place, modifying educational roles (educational, research, faculty) based on market-place, government supporting of internal knowledge-producing and productions, advertising of universities' ideas regarding market- place, macro and micro policy making regarding market-place. The horizontal policymaking based on market-place includes: changing the curricula based on economical approaches, relationship between industry and university, training entrepreneurship students in market-place, policies of training and learning skills, using information technologies in market-place and universities, considering educational issues based on economy, turning Human resources to Human Capital, changing evaluation system. At last, the policymaking based on market-place model was presented by using the research findings.