Since the development of western China, Xinjiang has improved its industrial structure upgrading speed and regional innovation capacity, and achieved rapid economic growth. Based on the relevant data of industrial structure upgrading, regional innovation capacity and economic growth in Xinjiang from 2000 to 2020, VAR model is constructed by using Eviews9.0 software to test the smoothness and do impulse response and variance decomposition. According to the estimation results of VAR model, it is found that Xinjiang's regional innovation capacity and industrial structure upgrading have a significant impact on Xinjiang's economic growth. However, there are still some unreasonable problems of industrial structure. Based on the results of this model, countermeasures and suggestions are put forward centering on regional innovation ability and industrial structure upgrading.