Based on the panel data of 9 provinces and 2 cities in the Yangtze River Economic Belt from 2008 to 2017, the decoupling-PVAR two-stage model is used to analyze the evolution trend and impact mechanism of the relationship among new urbanization, upgradation of industrial structure and water pollution. This study shows that: The relationship among water pollution, new urbanization, and industrial structure exhibits the evolutionary trend of “expansion negative decoupling-strong decoupling”, indicating that the urbanization and industrialization of the Yangtze River Economic Belt have experienced “pollution first, then governance” at this stage, but ultimately achieved the dual goals of economic development and water pollution improvement. The results of impulse response and variance decomposition indicate that the water pollution control effect of new urbanization at this stage is not obvious, there is a clear negative relationship between water pollution and upgradation of industrial structure, and the former has a stronger explanatory effect on the latter. The variances of the upper, middle and lower reaches of the Yangtze River Economic Belt are decomposed, respectively, and it is found that there are obvious regional differences in the degree of mutual influences between the variables. The prevention and control policies for water pollution should be formulated according to specific situations.