This paper considers an ant colony optimization algorithm based on AND/OR graph for the integrated process planning and scheduling (IPPS). Generally, the process planning and scheduling problem are studied separately. Due to the complexity of the manufacturing system, IPPS combining both the process planning and scheduling problems in the consideration can depicted the real situation of the manufacturing system. The IPPS is represented on AND/OR graph consisting of nodes, undirected arcs and directed arcs. The nodes denote the operations of the jobs, and the undirected/directed arc denotes the possible visiting path among the nodes. Ant colony go through the necessary nodes on the graph from the starting node to the end node to obtain the optimal solution with the objective of minimizing makespan. In order to avoid the local convergence and the low convergence, some improved strategy is incorporated in the standard algorithm. Extensive computational experiments have been carried out to study the influence of various parameters on the system performance.