Abstract: Realizing the transition from factor-driven to innovation-driven is the key to my country’s sustainable and healthy development.China is already in a critical period of economic and industrial restructuring.Speeding up green technological innovation and industrial upgrading is an objective requirement for my country to transform from a manufacturing country to a manufacturing powerhouse and to achieve a rise in the industrial chain.In the current industrial upgrading and green development, it is necessary and practical to discover the role of green technological innovation and the degree of marketization in the process of industrial upgrading and evolution from agglomeration of innovative elements.Based on this, this article uses panel data from my country’s 31 provinces, autonomous regions, and municipalities from 2000 to 2019 to construct an evaluation index system for innovation factors, green technology innovation capabilities, and marketization levels, and comprehensive evaluation based on the entropy TOPSIS method.Use the mediation effect and moderation effect model test to explore the mediation effect of green technology innovation and the moderation effect of the degree of marketization in the process of the impact of the agglomeration of innovative elements on industrial upgrading.Concluded as follow: (1) Agglomeration of innovative elements can positively promote industrial upgrading. (2) The agglomeration of innovative elements can promote industrial upgrading by improving green technological innovation, and the ability of green technological innovation has a complete intermediary effect.(3) In the influence of the concentration of innovative elements on green technological innovation, the degree of marketization has a positive regulatory effect.Therefore, the government should promote the construction of factor markets, give full play to the decisive role of the market in resource allocation, and promote the formation of green technological innovation capabilities.