The Russian enterprises of mechanical engineering differ from the similar enterprises of the USA, Germany, Japan and other advanced countries in low investment appeal, a low level of business and low level of competitiveness. Article has actual character because the mechanical engineering is urged to provide with production equipment key sectors of economy and first of all the processing industries and by that determines a condition of potential production of Russia. The author considers the main problems and prospects of development of mechanical engineering in Russia. Represents the main ways of growth of competitiveness of mechanical engineering. Draws conclusions that for development of this industry it is necessary to rely on foreign experience. Carrying out radical reforming of an industry of mechanical engineering will allow Russia to enter the world market with high-technology products and to take on it advantageous position. It will form base for stabilization of economy and progress of industry of Russia in general.