Abstract: Under the background of territorial spatial planning, an industrial development optimization model was constructed. Taking Lincang City as an example, the water and atmospheric environmental capacities were first calculated. Subsequently, three different scenarios were established. Through the construction and solution of the optimization model, corresponding regulatory suggestions for industrial development optimization were proposed to guide the industrial development of Lincang City. The results show that: ① Under the scenario of “available water under background conditions + suitability evaluation of land resources + environmental capacity”, cultivated land resources become the primary limiting factor for the economic and social development of Lincang City, while the resources and environment can support the GDP and population scale set by the “14th Five-Year Plan” for Lincang’s national economy. ② Under the scenario of “available water supply capacity + cultivated land protection red lines and urban development boundaries + pollutant emission reduction constraints”, it is necessary to specifically reduce the corresponding pollutant emission efficiency index values and significantly improve the relevant land resource utilization efficiency. ③ Under the scenario of “total available water control + constraints of cultivated land protection red lines and urban development boundaries + constraints of pollutant emission reduction”, the utilization efficiency of relevant land and water resources must be further significantly enhanced.