Abstract: Gansu Province was taken as the sample to investigate the feasibility of realizing economic growth and environmental improvement in the less developed areas with fragile ecological environment. The panel data of Gansu’s 12 cities in 2006-2013 were selected, and fixed effect model used to infer the internal causal relations among the undertaking of industrial transfer, economic growth and environmental pollution. The results show that the undertaking of industrial transfer in Gansu presents a trend of rapid growth, and the growth rate is much higher than the economic growth and pollution emissions. The undertaking of industrial transfer not only promotes the economic growth, but also improves the environment. There exists a positive correlation between economic growth and environmental degradation in Gansu Province in the short term, and it presents the inverted U-shaped curve in the long term. Therefore, it is suggested that the province should develop dual role of the undertaking of industry transfer in the future.