Sherwood Anderson is one of the most influential writers of the United States in the 20th century. His masterpiece is Winesburg, Ohio which tells the story of the transition from the agricultural industry era to the industrialization era in the United States at the end of the 19th century and the people in Winesburg have undergone earth‐shaking changes in living, psychological and social aspects. This paper employs spatial criticism theory to illustrate the modern dilemma of small town people under the background of industrial transformation from the levels of physical space, social space and spiritual space. In physical space, Winesburg people experience an ecological crisis. In social space, people in small towns face a spiritual wasteland because of the materialization of values. In psychological space, people have communication obstacles.