Abstract: Against the backdrop of China’s "Prospering the Nation with Quality" and "Beautiful China" initiatives, the co-evolution of regional industrial upgrading and green development has become imperative. Drawing on panel data for the 41 cities of the Yangtze River Delta from 2006 to 2019, this study employed a panel vector autoregression (PVAR) model, impulse response functions (IRF) and forecast-error variance decompositions to examine the bidirectional interaction between industrial structure and green development. The main findings were as follows: (1) The industrial structure across the Yangtze River Delta advanced toward greater sophistication and rationality, yet intra-regional disparities remained pronounced. Shanghai, southern Jiangsu, northern Zhejiang and a handful of cities in Anhui simultaneously improved both the rationalization and sophistication of their industrial structures, whereas other areas lagged substantially. (2) Overall green-development performance in the Yangtze River Delta became better, but the trajectories diverged between steady ascents and fluctuating progress. Shanghai and the provincial capitals had sustained improvements, while Anhui exhibited greater volatility and was at consistently lower levels. Technological advancement emerged as the primary constraint on further green-development gains in the region. (3) Industrial-structure optimization and green development exhibited a dynamic pattern of “short-term inhibition, long-term synergy.” Both processes displayed significant self-reinforcement. Notably, the rationalization of industrial structure explained a larger share of the forecast-error variance in green development than the sophistication dimension. These conclusions provided scientific guidance for high-quality, coordinated development in the Yangtze River Delta and offered theoretical support for exploring win-win pathways of integrating economic growth with ecological improvement.