Mining activities have led to severe air pollution problems while they make great contributions to economic construction. Therefore, as a typical steel-industry city in southwest China, Panzhihua, its air pollution has received extensive attention. The characteristics of PM1 in different functional areas of Panzhihua from 2018 to 2019, and the changes of its microstructure and potentially toxic elements (PTEs) and the sources of PM1 were analyzed. The results showed that the mass concentrations of PM1 in the heavy pollution area of Nongnongping (NNP) and the complex industrial pollution area of Hemenkou (HMK) were 12.12–145.30 μg/m3 and 14.38–67.02 μg/m3, respectively. Seasonal PM1 mass concentrations in the two functional areas could be arranged in the following order: winter > autumn > spring > summer. The main particle types in PM1 were fly ash, soot, sulphate particles, aluminosilicate particles and metal particles. Potential sources of PM1 in Panzhihua included coal burning, biomass combustion, automobile exhaust and mining activities. At the same time, the average concentrations of PTEs at NNP were also higher than those at HMK because of smelting activities. Enrichment factor analysis showed that most of the PTEs came from human sources. The results could provide theoretical guidance for environmental management.