Under the background of “dual-circulation” strategy and guided by Smith’s division of labor theory, this paper sets up a regional economic model with “dual-circulation” characteristics based on the intermediate input model of the new economic geography theory and the human capital model of the new growth theory. Also, the model absorbs the research results of the neoclassical theory on division of labor and integrates the congestion effect brought by land factors. On this basis, this paper deeply analyzes the driving forces behind the evolution of China’s regional economic pattern, and explores the impact of the implementation of “dual-circulation” strategy on China’s regional economic pattern through the numerical simulation and empirical test. It is found that: First, the development gap between coastal and inland regions will experience a process of rapid increase, rapid decrease, and slow increase. Although the gap will converge in the medium term, it will not disappear, even face a widening risk in the later stage. Second, the development gap between coastal and inland regions is closely related to the external and internal transaction efficiency of the two regions. Under the principle of division of labor, it will evolve into different regional industrial structures and lead to economic development gaps between regions. Third, the implementation of “dual-circulation” strategy mainly affects China’s regional economic pattern from the perspective of transaction efficiency. The regional development gap in China will tend to narrow when following the environment of foreign trade protection policies, the improvement of domestic regional integration, and the decrease of inland foreign trade costs. The results indicate that the formation of China’s regional economic pattern is the result of the evolution of regional division of labor under market competition, and is a manifestation of Smith’s division of labor theory in the regional economy. This paper not only solidifies the micro foundation of regional economic relationship analysis, but also proves the rationality of Smith’s division of labor theory from mathematical, empirical, and practical perspectives, which provides theoretical support for the study of spatial economic issues in the context of “dual circulation”.