In order to thoroughly study the mechanism of environmental regulation on the industrial structure adjustment, this paper makes an empirical research on the effect environmental regulation on industrial structure adjustment based on the simultaneous equation model using panel data 1998-2014 of all the provinces in our country. The study found that the effect of environmental regulation on the industrial structure adjustment would exist forced mechanism and spatial heterogeneity, namely, to increase the intensity of environmental regulation can promote the adjustment of industrial structure, and the influence to the central area is the most obvious, followed by Eastern, western is not obvious.