The New-urbanization, which means the integration between urbanization and industrialization， is the important engine of the China’s economy further development and transition. At the same time, it is worth of special study to the question of how to drive the integration between urbanization and industrialization in Western underdeveloped region. In the paper, PVAR model is constructed for an empirical study on the effect of the integration between urbanization and industrialization in Western underdeveloped region based on the panel data of Three Gorges Area of Chongqing during the period of 2003 to 2012. We find that, 1) the agriculture development has a weak and negative effect on the urbanization, which means so-called “adverse urbanization”, while the urbanization has prominent and positive effect; 2) there is an interactive and effective mechanism between manufacture and urbanization, and the effect of the integration is very prominent; 3) there is no prominent effect of the integration between urbanization and service. Policy implications of the study lies: perhaps it is an optimal choice to encourage the coordinate development among modern agriculture, manufacture and urbanization.