As a kind of vital way of transportation in midto late industrialization, water transportation is closely related to the development of industrial economy. Based on the panel data of 13 cities in Jiangsu province from 2000 to 2016, the study uses threshold model to do a research into the relationship between water transportation investment and industrial output, and makes a comparison between water transportation investment average value and water transport investment threshold value in Jiangsu province. The spatial spillover effect is further used to explain the threshold characteristics. The results show that there is a significant double threshold effect on industrial output. The average value of water transport investment capital stock in 2006 and 2011 is the closest to the water transport investment threshold. Take 2006 and 2011 as the demarcation point, it is found that the water transport investment has a positive spatial spillover effect on the industrial economy of Jiangsu province. The growth of the added value of elasticity of the spillover effects is slightly smaller than that of the threshold model of elastic coefficient values change. Therefore, the water transport investment mainly has impact on the industrial development level among regions through the indirect effect.