Abstract To figure out the effect of stellar mass and local environment on morphological transformation and star formation quenching in galaxies, we use the massive (M _* ≥ 10¹⁰ M _⊙) galaxies at 0.5 ≤ z ≤ 2.5 in five fields of 3D-HST/CANDELS. Based on the UVJ diagnosis and the possibility of possessing a spheroid, our sample of massive galaxies is classified into four populations: quiescent early-type galaxies (qEs), quiescent late-type galaxies (qLs), star-forming early-type galaxies (sEs), and star-forming late-type galaxies (sLs). It is found that the quiescent fraction is significantly elevated at the high ends of mass and local environmental overdensity, which suggests a clear dependence of quenching on both mass and local environment. Over cosmic time, the mass dependence of galaxy quiescence decreases while the local environment dependence increases. The early-type fraction is found to be larger only at the high-mass end, indicating an evident mass dependence of morphological transformation. This mass dependence becomes more significant at lower redshifts. Among the four populations, the fraction of active galactic nuclei (AGNs) in the qLs peaks at 2 < z ≤ 2.5, and rapidly declines with cosmic time. The sEs are found to have higher AGN fractions of 20%–30% at 0.5 ≤ z < 2 . The redshift evolution of AGN fractions in the qLs and sEs suggests that AGN feedback could have played important roles in the formation of the qLs and sEs.