Under the increasingly urgent background of global economic transformation, upgrading, and innovation-driven high-quality development, exploring how innovation-driven policies facilitate the optimization and upgrading of urban industrial structures has become crucial for realizing Chinese-style modernization and advancing the development of new productive forces tailored to local conditions. The pilot policy of innovative cities in China was treated as a quasi-natural experiment. Panel data from 281 prefecture-level cities between 2006 and 2019 were utilized, and a multi-period difference-in-differences (DID) model was employed to evaluate the policy's impact on urban industrial restructuring. The results indicate that the innovative city pilot policy significantly promotes the sophistication of urban industrial structures, while its effect on industrial structure rationalization remains statistically insignificant. These findings are validated through a series of robustness tests. Heterogeneity analysis reveals more pronounced policy effects in cities with higher administrative levels, greater proportions of tertiary industry employment, development models not fully reliant on resource endowments, and those located within urban agglomeration economic belts. Mechanism analysis further demonstrates that the policy positively affects industrial structure sophistication through three channels: expanding the digital economy scale, optimizing resource allocation efficiency, and enhancing human capital supply. It empirically reveals the pathway through which innovation policies promote industrial structure optimization, providing both theoretical foundations and practical references for enhancing policy effectiveness and advancing high-quality regional economic development.