Environmental regulations play a vital role on upgrading or transforming industrial structure, economic growth and environmental protection. This paper discusses the mechanism of environmental regulations on industrial structure, and uses panel data to establish a counting model to check the impacts of environmental regulations on upgrading industrial structure based on 16 cities in Yunnan province. 

Yunnan's  environmental regulation intensity has a upside-down “U-shaped” relation with technical innovation, which means technical innovation level can be improved if environmental regulation intensity is less than 6.46, and has a positive “U\|shaped” relation with industrial structure upgrading in which increasing environmental regulation intensity may promote industrial structure upgrading if the environmental regulation intensity continues to increase beyond the inflection point value of 5.20. Consumption structure, investment structure and foreign use level are positive to environmental regulation, but negative to industrial structure upgrading, indicating that environmental regulation can not boost industrial structure upgrading by improving consumption and investment structure. This paper presents suggestions on promoting industrial structure upgrading from increasing environmental regulation intensity, distributing allowance to small and medium-sized companies and enforcement of environmental regulations.