Abstract:This paper, from the angle of innovation production, divides innovation into two stages of R&D and product innovation based on the 30 provinces and regions of China 2005-2015. The paper analyzes the internal mechanism and the operation mechanism of the two stages of regional innovation to promote the optimization of industrial structure. The results show that there is a significant spatial interaction in the regional industrial structure optimization; the areas with high optimization of industrial structure have siphon effect on the surrounding areas, which leads to the different steps of the optimization of the industrial structure in our country. Further research shows that the two stages of innovation have positive effects on industrial structure optimization. And this kind of stimulative function not only takes place in the local, but also has the remarkable spatial overflow: the R&D innovation promotes the industrial structure rationalization function very obviously, but the product innovation is more apt to promote the industrial structure to a higher level.