By using provincial panel data from 2004 to 2020, This paper verified the mechanism of the population ageing impact on services by using intermediary effect model and threshold model. The research shows that: (1) Population aging has a significant negative effect on the development of both productive services and life services in general. As for the aspect of regional analysis, population aging hinders the productive service industry in the central and western regions, but promotes it in the eastern region. (2) The results of mechanism analysis show that population aging inhibits productive services through labor endowment and consumption demand, but promotes it through investment demand; Population aging also restrains living services through consumer demand, but promotes it through human capital and investment demand. (3) The threshold regression results show that in the development stage of high economic level and high urban agglomeration, the negative effect of population aging on the development of service industry has been alleviated. In order to realize the high-quality development of service industry, this paper holds that we should actively respond to the ageing challenges by increasing investment in science, technology and education, accelerating the substitution of capital and technology for labor in service industry and narrow the gap between urban and rural areas, as well as promote industrial synergy development.