China’s industry is still in the middle of industrialization. Land use activities are crucial to the growth of carbon emissions. However, few scholars focus on the influence mechanism between industrial land use efficiency (ILUE) and industrial carbon emissions. In this paper, the threshold model and the spatial Durbin model are used to investigate the spatial threshold effect of industrial land use efficiency on industrial carbon emission from 2003 to 2018. The results show that ILUE of China’s provinces basically shows an improvement trend, with little difference in spatial distribution, showing a pattern of high in the eastern region and low in the western region. When economic development level (A) and technical level (T) are taken as the threshold variable, ILUE has a single threshold effect on industrial carbon emissions in the eastern region. In the central region, with a as the threshold variable, ILUE shows a double threshold effect on industrial carbon emission. Under the 0–1 geographical proximity weight matrix, the indirect spillover effect of ILUE on reducing regional carbon emissions is significant, and the indirect effect is even greater than that on regional carbon emissions. The spatial spillover effect is not significant in the eastern region. These findings have important practical significance for promoting regional industrial transformation and upgrading, optimizing land space and realizing high-quality economic development.