This paper analyzes the formation and evolution of regional division under the background of industrial agglomeration and diffusion based on the framework of new classical economics. Regional resource endowment and comparative advantage are different in the initial stage, and different industries will agglomerate in different regions, thus regional division is formed, and then the equilibrium of regional division is achieved by interregional trade. Because of the transformation of comparative advantage, the area which fits to the industry of forming agglomeration will become no longer to fit, thus it causes the industries diffusion and re-agglomeration at other areas, which leads to further evolution of regional division. On the basis of industrial agglomeration and diffusion, coordinating development of regional economy in China can be realized by establishing the relationship of regional division and cooperation.