Achieving the county-level fiscal sustainability is related to the local government’s governance capacity. This paper first measures and analyses the negative and positive indicators of the county-level fiscal sustainability in China, and then examines the impacts of the establishment of development zones on the county-level fiscal sustainability by utilizing the difference-in-difference method (DID). Research Findings: The construction of provincial development zones has economically secured the fiscal sustainability of counties through investment and consumption drive. The economic agglomeration on this basis has exerted a consolidating effect on the county-level fiscal resources. Both effects show a hysteresis quality. The construction of provincial development zones also demonstrates its adverse impacts in increasing the risks of county-level debt and expenditure gap. This paper will provide some policy suggestions for strengthening the county-level fiscal sustainability and constructing the provincial development zones.