Digitalization is an important direction for the upgrading of China's industrial structure, which plays an important role in promoting the value-added of new industries, the reorganization of factor allocation and the development of new markets. Two kinds of manufacturing upgrading evaluation index from the output structure and employment structure was constructed, and Dagum Gini coefficient was used to analyze the regional differences and spatio-temporal pattern of industrial structure upgrading in China. At the same time, the influencing factors of industrial structure upgrading into internal factors and external factors were divided, and spatial panel data model was used to analyze the mechanism of industrial structure upgrading in China based on two kinds of spatial weights. The results show that the upgrading level of China's industrial structure has been continuously improved from 2011 to 2020, and the upgrading index of industrial structure has increased from 0.886 to 1.434, with an annual growth rate of 5.42%. The regional difference is decreasing, and the regional difference mainly comes from the inter-group difference, and the intra-group difference is the largest in North China, East China and South China. Spatial econometric model estimates show that digitalization has a significant role in promoting the upgrading of industrial structure. Technological innovation, factor endowment, ownership structure and export level contribute to the upgrading of industrial structure, while human capital and foreign technology spillover have inhibitory effects on the upgrading of industrial structure.