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This study employed a data envelopment analysis (DEA) by using slacks-based measure (SBM) with undesirable outputs to assess the industrial environmental efficiency of western China during the period of 2001-2015. The Malmquist index was further used to examine the changes in the industrial environmental efficiency of the analyzed region. The result showed that western China presented a low industrial environmental efficiency throughout the period of 2001-2015. Chongqing City was the only province that exhibited strong economic and environmental coordination. The level of technical development was identified as a key determinant of industrial environmental efficiency. This study provided policy implications on emissions reduction and the improvement of industrial efficiency. Limitations of the approach were provided to lay foundation for future studies.