Among all the 119 counties (cities, districts) in Shanxi province, China, there are 94 counties with coal resources, and 80% are resource-based mining cities. Since 2008, a number of small coal mines have been shut down due to the integration of coal resources in Shanxi Province, as well as the merger and reorganization of large state-owned coal mining enterprises that are under efficient operations. This series of integrations highlights the issue of channels of employment in industrial mining cities in Shanxi province, followed by issues such as urban labor triage, underdeveloped urban functions, and function transformation lagging behind the industrial transformation, shortage of follow-up sustainable development driving force, and so on. This paper takes small industrial mining cities in Shanxi province as the research subject, taking their function transformation and various problems during the sustainable development as the main content, to propose relevant strategies for sustainable development; therefore, this study is of great significance to all-leveled resource-based industrial mining cities, which are in a transition period, in Shanxi province.