Abstract: Based on the coupling effect between policies under the "new normal" as a breakthrough point, this paper explores the mechanism of government subsidies cooperating with environmental regulation to impel industrial upgrading, and empirically tests the impact of the coupling effect between environmental regulation and government subsidies on industrial restructuring and upgrading by using China's inter-provincial panel data from 2007 to 2015. The study finds that the impact of environmental regulation on industrial structure upgrading presents a significant "threshold" feature. The coupling effect of environmental regulation and government R&D subsidy policy can significantly promote industrial structure upgrading, but there is obvious regional and regulatory heterogeneity. This paper further explores the mechanism of the effect of policy coupling on the upgrading of industrial structure. The results show that the policy coupling effect does not show an effective mitigation effect on the cost of compliance, but can significantly enhance the "innovation compensation effect" and thus play a positive role in promoting the upgrading of industrial structure.This paper concludes that diversified policy mix is of great significance for giving full play to complementary advantages among policies and promoting industrial upgrading.