The　paper　attempts　to　build　a　theoretical　model　to　explore　the　relationship　between　agglomeration　economies　and　air　pollution　in　urban　China.　The　method　of　Spatial　Lag　Model　is　applied　to　test　our　theoretical　hypothesis　based　on　China＇s　289　cities　panel　data　during　the　period　of　1998-2016.　The　empirical　result　shows　that　the　impact　of　industrial　agglomeration　on　urban　air　quality　is　not　simply　linear　or　described　by　inversed　U-type　curve　but　N-shaped　characteristic.　To　be　specific,　air　pollution　is　positively　and　significantly　affected　by　industrial　agglomeration　whether　at　its　beginning　or　diseconomies　stages.　The　development　of　industrial　agglomeration　in　its　mature　and　effective　stage　can　reduce　haze　pollution　significantly.　The　result　is　quite　robust　and　consistent　after　replacing　variables　and　using　other　regression　methods.　This　paper　sheds　new　light　on　the　question　of　how　to　coordinate　the　relationship　between　agglomeration　economies　and　environment　pollution.　©　2021　ACM.