Based on the panel data of 30 provinces in China from 2005 to 2016, the paper uses the panel threshold model to empirically analyze the impact of fiscal R D subsidies on the technological innovation and industrial transformation and upgrading. The result shows that: the impact of fiscal R D subsidies on technological innovation has a double threshold effect based on the intensity of fiscal R D subsidies, and its impact decreases as the intensity of government RD subsidies increases. Fiscal R D subsidies have a positive impact on industrial transformation and upgrading through technological innovation. The indirect impact of fiscal R D subsidies on industrial transformation and upgrading has a double threshold effect based on the strength of fiscal R D subsidies. The magnitude of their impacts increases first and then decreases. Therefore, local governments should make sure that the intensity of fiscal R D subsidies is within a reasonable range in order to maximize the incentive role of fiscal R D.