Exposure to heat stress causes diminished work performance and leads to economic loss. In the last two decades, China has experienced both rapid economic development and environmental warming; however, the spatiotemporal variations of association between environmental heat and labor loss have been rarely investigated behind this double impact. Here, we evaluated the variation in China's heat-induced labor productivity loss and related economic cost from 2001 to 2019 and investigated the effect of economic development and regional warming. We found that decline in labor productivity because of heat stress increased significantly (p < 0.05 for heavy-intensity work), and the corresponding economic loss also exhibited a drastic increase by 6- to 9-fold. The relative economic loss showed a slight but nonsignificant increase with an average value of 0.54% of the annual total earnings. At the sub-regional and sectoral level, adverse effects were more prominent in the southeast region, and the secondary industry sectors, such as construction and manufacturing, contributed to larger proportions of economic losses. The transformation of industrial structure made economic sectors more vulnerable to heat exposure, and increasingly preventive effects of air-conditioning use were noted on economic damage due to heat-induced productivity decline (36.0% relative economic benefits in 2019 compared to 9.7% in 2001). Our findings could provide a deep insight into heat burden on occupational health and heat adaptation strategies regionally under climate change, especially in developing areas with higher temperature and humidity environment.