Abstract: In order to improve the urban ecological environment , to enhance the sustainability and livability of urban development, and to revitalize the stock and improve the quality, cities need to be renewed urgently, and industrial development needs to be transformed and upgraded. This article takes Zhili Town, in Huzhou City, Zhejiang Province as an example to study the relationship between industrial transformation and upgrading and urban renewal. The results show that: (1) There is a relationship of mutual influence and promotion between urban renewal and industrial transformation. Urban renewal realizes the transformation and upgrading of industrial development by renewing industrial space, while industrial transformation and upgrading accelerates the renewal of industrial space, and then accelerates urban renewal. (2) Urban renewal can be used as one of the development paths for small towns to realize industrial transformation. By renewing the industrial development space in small towns, industrial transformation can be realized. In the specific update practice process, the actual situation shall prevail and an update mode that meets the needs of actual development shouldl be selected.