Strengthening the fundamental role of factor endowment in the transformation and upgrading of industrial structure is an important and reliable way to promote the high-quality development of China’s economy. Based on provincial panel data from 2012 to 2021, the article explores the impact of factor endowment on industrial structure transformation and upgrading, as well as the moderating effect of the quality of economic development between the two. The study found that there is a significant U-shaped relationship between labor endowment and industrial structure transformation and upgrading, and the improvement of economic development quality can strengthen the U-shaped relationship between the two. Capital endowment has an inverted U-shaped relationship with industrial structure transformation and upgrading, and the improvement of economic development quality weakens the inverted U-shaped relationship between the two. The endowment of science and technology has a significant role in promoting the industrial structure transformation and upgrading, but the improvement of the quality of economic development has not yet played a significant role in enabling the industrial structure transformation and upgrading by the endowment of science and technology. The role of cross-effects between factor endowments on industrial structure transformation and upgrading is further examined. The results show that there are cross-effects between labor endowment and capital endowment on industrial structure transformation and upgrading. At this stage, there is a mismatch between science and technology endowment and labor endowment and capital endowment respectively, which has not yet formed a cross-effect to drive industrial structure transformation. This study expands the driving factors of industrial structure transformation and upgrading from the perspective of factor endowment, and provides theoretical support for exploring the power engine of industrial structure transformation and upgrading in the context of high-quality economic development by taking the quality of economic development as the expansion point. The study also provides useful reference for the government to establish a high-quality and efficient supply system to boost the high-quality development of the economy.