This paper explores the effects of population aging on service industry by an empirical analysis using data from 55 countries，1960－2009. Results show that the proportion of service industry increases with population aging，but the effects through consumption path become statistically significant only after the level of population aging surpasses a certain point．We call it“demand effect”．When population aging proceeds to a very high level，the demand effects disappear as employment growth in the service industry is constrained．The demand effects differ between developed and less developed countries because of their different stages of economic development and population aging，especially different status of service industry measured by its proportion of GDP，labor productivity and the degree of marketization．The nature of the demand effects depends on both the level of population aging and the proportion of consumption in GDP．Thus，it is important to accelerate the development of the service industry in China both for positive response to population aging and sustainable economic development．