Intensive land use serves as a crucial lever for coordinating economic development and carbon emission reduction. Improving land use efficiency is of vital importance for promoting green transformation in the industrial sector. Based on panel data from Chinese prefecture-level cities spanning 2010 to 2022, this study constructs a two-stage analytical framework integrating the Super-Slacks-Based Measure (Super-SBM) model and a Difference-in-Differences (DID) approach to systematically evaluate the impact and underlying mechanisms of the 2014 land-saving and intensive-use policy on urban industrial carbon total factor productivity (CTFP). The results indicate that: ① the policy significantly improved urban industrial CTFP, as confirmed by a series of robustness checks; ② mechanism analysis reveals that the policy primarily enhanced CTFP by promoting technological progress in the industrial sector, and meanwhile both environmental regulation intensity and digital infrastructure have significant positive moderating effects on the policy outcomes; and ③ heterogeneity analysis shows that the policy effects are more pronounced in mega cities and large cities, and that differences in urban economic density also influence policy effectiveness. These findings offer empirical evidence and policy implications for integrating land-use strategies with China's “dual-carbon” goals and advancing green industrial transformation in the new development stage.