The aim of this study based on the panel data of 30 Chinese provinces obtained from 2000 to 2016 was to calculate the green total factor efficiency (GTFE) of industrial water resources by applying the Super-Slack Based Measure (SBM) model of non-expected output, and to analyze the effect of core variables (technological innovation, environmental regulation, and the interaction of these two factors) and control variables (education level, industrial development and the degree of openness) on the GTFE of industrial water resources by making use of Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model and the dynamic panel system Generalized Method of Moments (GMM). The results show that technological innovation had no significant impact on the GTFE of industrial water resources in China and the eastern region. It had a restraining impact on the central region, while a positive effect on the western region. Environmental regulation was not conducive to the improvement of China's GTFE of industrial water resources, and the promotion of efficiency in the eastern, central, and western regions was not significant. The interaction between technological innovation and environmental regulation positively affected the GTFE of industrial water resources of China, whereas it had a negative impact on the central region and an insignificant impact on the eastern and central regions. This showed that there were regional, economic, and industrial structure differences in the effect of technological innovation and environmental regulation on the GTFE of industrial water resources. In addition, the first-phase lag of GTFE of industrial water resources in China and the central region, the degree of openness of China and eastern, central, and western regions, the education level of central residents, and the industrial development degree of western region effectively improved the GTFE of industrial water resources, whereas the education level of western residents had an inhibitory impact. Therefore, China needs to formulate a differentiated and diversified technological innovation system and environmental protection policy, improve the green research and development investment of industrial enterprises, and form a green development model; at the same time, China needs to guide rational consumption, develop high-tech industries, and adhere to opening up.