This paper uses threshold panel data model to verify the relationship between economic growth and environment quality under the framework of Environmental Kuznets Curve. The study shows that there is an significant threshold effect between China’s economic growth rate and the environment variable. And in different phases and stages of economic development, economic growth’s negative impacts on environment differ, and the affecting mechanism varies. When in the lower income stage, per capita income level relates to environment quality in a linear way. However when income increased, an inverted U type correlation comes up, with its turning point at the increasing level of sample average income. The number of provinces gradually developing into a higher level is increasing as income level goes up, resulting in much less pollutants generated while income surges. Therefore differences among regions in terms of their development levels have significant importance to China’s environment. In the meantime, industrialization brings in an increasingly serious pollution, while technical efficiency and opening up to the outside are beneficial to environmental improvement.