By constructing the index system, an in-depth study was made on the development level of digital economy and the development law of industrial structure in 31 provinces （due to the lack of data, the statistical data mentioned here do not include the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan Province） in China from 2013 to 2020, focusing on the effect of institutional quality in the optimization of industrial structure in digital economy. The results show that the improvement of the development level of digital economy has a significant promoting effect on the optimization and upgrading of industrial structure, and the optimization of institutional quality can enhance the promoting effect.From the perspective of heterogeneity, the higher the level of institutional quality, the stronger the promoting effect of digital economy on the optimization of industrial structure. Meanwhile, the effect of digital economy on the optimization of industrial structure in the eastern region is more obvious, but the impact on the central and western regions is not significant. Institutional quality is also an important driving force for information infrastructure, industrial digitization and digital industrialization to influence the rationalization and upgrading of industrial structure. The findings of this paper provide theoretical reference and practical value for our country to optimize industrial structure efficiently and promote economic system reform at a high level.