How to harness the complementary advantages of industrial policy and talent policy to activate endogenous regional innovation is a key question for achieving China’s high-level technological self-reliance. Using panel data on 149 Chinese cities from 2009 to 2021, this study treats the joint implementation of the dual policies—the innovative industrial cluster policy and the talent attraction policy—as a quasi-experiment and employs a difference-in-differences (DID) design to empirically examine their impact on urban innovation capacity and the underlying mechanisms. The results show that: (1) the dual policies significantly enhance urban innovation capacity, and this finding remains robust across a series of robustness checks; (2) mechanism analyses reveal that the dual policies promote innovation through three channels—a financing-constraint alleviation effect, an industrial-structure upgrading effect, and a science and technology (S&T) talent agglomeration effect; and (3) further heterogeneity analyses indicate that the dual policies exert stronger effects in cities with higher human capital levels and less advanced industrial structures. Moreover, the dual policies outperform single-policy implementations, and sequencing matters: implementing the industrial policy before the talent policy yields greater innovation gains than the reverse order. These findings provide theoretical support and empirical evidence for cities to coordinate industrial policy and talent policy to accelerate innovation-driven development.