Water environmental quality deterioration has become a major problem in Taihu Lake Basin in Jiangsu Province (Suzhou, Wuxi, and Changzhou, SXC), China. As a result, degradation of the water environment has caused a great deal of concern among government officers and scholars at all levels. This study investigated the environmental quality of Taihu Lake as well as other major aquatic systems in SXC based on the method of small watershed division and a previously conducted report. The results showed that areas with water quality worse than class V comprise nearly 32% of the water in the region, that areas with class V water quality comprise 30% of the water in the region, and that areas less than class III only account for 27% of the water in the region. To reduce relevant water pollution caused by industrial development, the distribution of industrial pollution load in SXC and water-environmental effects of the industrial structure in the region were investigated. A survey of pollution sources was used to select socio-economic indicators of industrial development that directly or indirectly cause water pollution, including population density, urban land intensity, GDP per area, and the industrial structure. Additionally, the distribution of agricultural pollution and industrial pollution was analyzed according to the amount of pesticide and nitrogenous fertilizer applied per unit area and the amount of industrial wastewater discharged and COD per unit area in SXC. The results showed that agricultural pollution indicators are primarily concentrated in Liyang City, Yixing City, and Taicang City, while industrial pollution indicators are mainly concentrated in the urban core areas of SXC and the administrative centers of country-level cities. Application of principle componential analysis (PCA) of the indicators of comprehensive pollution revealed four principle factors negatively impacting water-environment quality in SXC, intensity of land-use, industrial structure, agricultural source pollution and industry source pollution. The rotated component matrix of PCA indicated that industrialization has the greatest effect on water environment quality in the region, but that deterioration of the regional water environmental quality is primarily caused by the complicated factors of regional development. Spatial analysis of the non-point and point source pollution in the study area was also conducted using the scores of PC3 and PC4. Moreover, the distribution integrated water pollution in SCX and regional decomposition were estimated based on the total score of PCA in each research unit. Interestingly, industrial development of the county-level cities was found to have a greater impact on the water-environment than that of the central cities of SXC. These findings were likely because county-level cities have undergone more extensive on industrial development, but have a lower level of water environment supervision. Finally, advice regarding the guidance of industrial development, such as integration of the industrial structure adjustment and layout optimization, heavily polluting industrial structure adjustment and agricultural nonpoint source pollution control in the key areas, and differential reduction of industrial pollution load in units is provided in an attempt to reduce the industrial pollution load in the study area.