Abstract Industrial wastewater typically contains high concentrations of contaminants and should be treated before being released into the environment, discharged to a sewer, or recycled for reuse. Large amounts of greenhouse gases are produced during the treatment processes of industrial wastewater, yet are scarcely considered in the emission estimation of the wastewater sector. Here, we present a comprehensive methane (CH4) emission inventory for industrial wastewater treatment in China from 2000 to 2021, employing industry-specific emission factors (EF), contrasting with previous estimations that rely on a uniform EF without differentiating between industries. We demonstrate here that total CH4 emissions from industrial wastewater treatment in China were 2.4 Tg in 2000 and 1.4 Tg in 2021, showing an increasing trend during 2000–2012 and a substantial decline afterward, which is attributed to government-led control measures aimed at promoting cleaner production practices and optimizing industrial structures. Eastern coastal provinces exhibit higher emissions than inland regions, with Shandong, Zhejiang, Henan, and Jiangsu collectively contributing more than 50% of total emissions. We identify the Textile and Light Industry as the pivotal sector for mitigating CH4 emissions from industrial wastewater treatment. This sector is responsible for 82.9% of total CH4 emissions, despite contributing less than 19.0% to the national total value-added industrial output. By 2035, around 48% of CH4 emissions from industrial wastewater treatment could be reduced, primarily driven by stringent mitigation measures in the Textile and Light Industry. Our study reveals a decoupling relationship between CH4 emissions from industrial wastewater treatment and industrial growth and proposes the Textile and Light Industry as a priority sector for CH4 mitigation efforts.