Abstract: Drawing on the growth pole theory, spatial heterogeneity theory, and endogenous growth theory, using the construction policy of sports industry demonstration bases as a quasi-natural experiment, this paper employs panel data of 314 prefecture-level cities in China from 2001 to 2020. By utilizing the propensity matching score and multi-period double difference method (PSM-DID), the paper systematically examines the net effect of the national sports industry demonstration base policy on urban economic growth and identifies its heterogeneity and mechanism. Findings reveal that the national sports industry demonstration base policy has a positive impact on regional economic growth; non-linearly affected by the stock of resources, its influence trajectory follows an inverted U-shaped curve. The economic growth effect brought by demonstration bases is significantly greater in central and western regions and lower-tier cities than in eastern coastal areas and higher-tier cities. The mechanism test indicates that the policy also affects the urban economy through the human capital aggregation effect and the technological growth effect. Based on these findings, we should strengthen the policy’s implementation in peripheral cities, maximize the crowding-in effect of the policy, break the low-end supply path dependence, accelerate the shaping of the entire industrial chain, and accelerate the construction of the digital infrastructure system. This approach will provide policy support to fully realize the economic benefits of the sports industry demonstration base policy, contributing to the construction of China’s modern industrial system and fostering regional coordinated development.