China is facing severe pressure on its water resources and water environments. Calculating the industrial water efficiency of each province is an important index for the central government to evaluate local governments. In the traditional water resources evaluation index, the industrial water use efficiency and pollutant discharge are evaluated separately. In this paper, we collected industrial input data, output data and pollutant discharge data with a four-stage data envelopment analysis to calculate China's industrial water use efficiency with and without considering pollutant discharge, and then analyzed the factors influencing the industrial water use efficiency. The results show that the eastern coastal provinces of China have the highest water use efficiency and are less affected by pollutant discharge than other provinces. The industrial water use efficiency of the central and western provinces is lower than that of the other provinces, and the industrial water use efficiency in the central provinces is greatly affected by pollutant discharge. Factor endowment, economic development level, scientific and technological progress, industrial structure, proportion of foreign investment, water consumption per 10000 yuan of value-added by industry, industrial sewage treatment capacity and educational investment have a significant influence on the industrial water use efficiency of China. We suggest that the government strengthen the construction of sewage plants and other related infrastructure in central provinces when conducting the industrial transfer of heavy polluting enterprises.