This　study　integrates　factor　price　distortion,　industrial　structure　upgrading　and　industrial　environmental　efficiency　into　an　analytical　framework　and　identifies　the　relationship　between　factor　price　distortion　and　industrial　environmental　efficiency　using　the　fixed　effect　model.　Meanwhile,　we　also　examine　the　influence　mechanism　of　industrial　structure　upgrading　on　the　factor　price　distortion　affecting　industrial　environmental　efficiency.　The　results　indicate　that　factor　price　distortion　significantly　inhibits　industrial　environmental　efficiency.　Moreover,　we　analyze　the　interaction　between　factor　price　distortion　and　industrial　structure　upgrading　and　find　that　the　inhibitory　effect　of　factor　price　distortion　on　industrial　environmental　efficiency　is　weakened　in　areas　with　better　upgrading　of　industrial　structure.　Further　investigation　of　the　heterogeneity　effect　shows　that　the　negative　effect　of　factor　price　distortion　on　industrial　environmental　efficiency　is　more　significant　in　the　central　and　western　regions.　The　government　should　improve　the　distortion　of　factor　price　and　optimize　the　industrial　structure　so　as　to　promote　the　green　development　of　industrial　industry.　©　2020,　HARD　Publishing　Company.　All　rights　reserved.