Based on the data of economic growth and environmental pollution in Jiangsu Province from 1985 to 2013, a VAR model for the economic growth and environmental pollution is established. Based on the estimation by using the VAR model, the impulse response function and variance decomposition are employed to analyze the two-way effect mechanism between the economic growth and environmental pollution in Jiangsu Province. The results show that there exists twoway effect mechanism between the economic growth and environmental pollution in Jiangsu Province, and the effect of the economic growth on the environment is greater than the adverse effect of the environment on economic growth. The main form of environmental pollution due to the economic growth in Jiangsu Province is industrial solid waste, and the pollutants which have greater effect on the economic growth are industrial solid waste (inhibition) and industrial emissions (promotion). According to the analysis of the results, some policy suggestions are put forward: optimization of industrial structure configuration, improvement of production technology, enhancement of level of combating industrial waste pollution, increase in investment of environmental protection and improvement of environmental protection regulations.