One of the important goals of government guided funds is to guide the upgrading of industrial structure. So, what is the impact of government guided funds on the upgrading of industrial structure? Based on the panel data of 31 provinces, autonomous regions and municipalities directly under the Central Government from 2007 to 2017, this paper constructs a panel data model to empirically study the overall and regional effects of government guidance funds on industrial structure upgrading. The results indicate that according to the unit root and pulse response function, the overall effect of government guided funds on industrial structure upgrading is significant, and government guided funds can promote industrial structure upgrading. According to the variable coefficient fixed effect model, there are regional differences in the effect of government guided funds on industrial structure upgrading. Provincial government guided fund funds in Guizhou and other provinces have a positive effect on industrial structure upgrading, while provincial government guided funds in Beijing and other provinces have a negative effect on industrial structure upgrading, while provincial government guided funds in Shandong and other provinces have no significant effect on industrial structure upgrading. Accordingly, local governments should expand the scale of government guidance funds or establish a government guidance fund exit mechanism according to local conditions, strengthen the scientific management of government guidance funds, improve the performance appraisal mechanism of government guidance funds, and give full play to the role of government guidance funds in promoting the upgrading of industrial structure.