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Abstract In China, industrial transformation have received attention as an effective means of CO2 emissions abatement. In our study, industrial transformation has a more generalized meaning including investment structure, trade structure, final demand structure, intensity structure and production structure. We built up a comprehensive analysis framework to evaluate how the industrial transformation process impact on CO2 emissions from the sectoral perspective, and applied it to the Yangtze River Delta, which is a leading region in terms of economy, industrial, and relatively low-carbon development within China. The results indicate the Yangtze River Delta has gradually developed toward an industrialization structure dominated by the service and advanced manufacturing sectors such as machinery manufacturing, leading to a slow growth in CO2 emissions during 2002–2012. The improvement of CO2 intensity and production structure in the service and construction sectors, and in machinery manufacturing particularly, has mainly led to this slow growth. Moreover, substantial CO2 emissions were avoided by imports from resource-related manufacturing and mining sectors. Within this region, the differences in improvement of CO2 intensity and production structure in machinery manufacturing, services sectors led to the gap in CO2 emissions between Shanghai and Zhejiang from 2002 to 2012. Meanwhile, swift investment, exports and inconspicuous improvement of CO2 intensity and production structure in machinery manufacturing and construction sectors widened the gap in CO2 emissions between Jiangsu and two other regions. Further, optimizing CO2 intensity and production structure is a feasible way to realize regional low-carbon development.