Under the new normal of the economy, it is of great significance to guide the development of science and technology, break the low-end lock-in of products and promote the high-quality development of the industry through the setting of environmental regulations. Based on the data of 30 provinces in China from 2007 to 2019, this paper systematically examines the impact of environmental regulation on the development of high-quality industry with the help of dynamic spatial Durbin model and semi-parametric spatial Durbin model.The study found that there are temporal inertia and spatial spillovers in high-quality industrial development. There is a "U"-shaped relationship between environmental regulation and high-quality industrial development, and there are regional heterogeneity and spatial spillover effects. Environmental regulation has the adjustment effect of industrial structure and technological progress on the high-quality development of industry. Therefore, it is necessary for local governments to scientifically set the intensity of environmental regulation, guide the transformation of economic development momentum to technology-driven and industrial structure optimization through the "innovation compensation effect", strengthen cross-regional enterprise technology research and development exchanges, and innovate regional industrial high-quality development coordination mechanisms.