Abstract: The transformation and upgrading of the industrial structure of the Yangtze River economic belt is an important issue in the national development strategy. The rational industrial layout to take the road of green development is the most important thing for the country to further promote the construction of ecological civilization. This paper constructs a double logarithmic model of the influence of environmental regulation on the upgrading of industrial structure and the rationalization of industrial structure. Based on the data of city agglomeration in Hunan, Hubei Jiangxi and Anhui province from 2003 to 2017, this paper studies the influence of environmental regulation on the upgrading of industrial structure and the rationalization of industrial structure. In order to study the heterogeneity of the influence, this paper introduces the interaction between economic development level and environmental regulation into the model. It is found that there is complementary effect and substitute effect on the level of economic development in the effect of environmental regulation on the transformation and upgrading of industrial structure. And the substitute effect is more than the complementary effect. In the long run, economic development can promote the transformation and upgrading of the overall industrial structure of the middle urban agglomeration of the Yangtze River economic belt. In terms of urban heterogeneity, environmental regulation has significant influence on optimizing the industrial structure of second-tier cities in the middle of the Yangtze River economic belt. At the same time, the positive effect of environmental regulation on the optimization of industrial structure of third-tier cities is greater than that of cities below third-tier.