This study evaluates the energy structure change and co-benefits in air pollution improvement in the transportation sector of China in line with the 2oC and 1.5oC targets based on an energy system optimization model IMED|TEC. The results show that under 2oC and 1.5oC targets in 2050, the energy consumption would decrease by 12% and 33% compared to the reference scenario. The energy mix would shift from traditional petroleum to cleaner biomass and even electricity or hydrogen energy. Under the 2oC scenario, biomass energy would account for 35% of the total energy consumption, whereas under 1.5oC scenario, hydrogen and electricity would account for about 67% of total energy consumption. Decarbonization of China’s transportation sector can bring significant air quality improvement. Under the 2oC scenario, CO2 emissions will be reduced by 38% in 2050, associated with reductions of NOx, SO2 and PM2.5 emissions by 35%, 34% and 38%, respectively. Under the 1.5oC scenario, the amount of pollutant emission reduction would be twice that at 2oC. However, emissions reduction rates would be quite limited for the aviation and waterway transportation sectors.