Based on the Chinese provincial panel data of the year 2003 to 2008, this paper builds EDI and HDIM, and utilizes the simultaneous equation model to analyze the relationship between environment pollution and human development. The findings reveal that the inverted “U” relationship between the two still hold even after treating the economic growth as an endogenous variable and controlling some variables, such as industrial structure; Meanwhile, the environment degradation also significantly impedes economic growth. To pay more attention and investment on human development is the key point to solve the dilemma of economic growth, resource exhaustion and environment degradation, which arises during the process of rapid development in China.