This article investigates the impact of environmental regulation on ecology. As the main way for the government to protect the environment, the implementation of an environmental protection tax has played an important role in China’s ecological efficiency. This article uses data from the implementation of environmental protection tax in Chinese cities to match the ecological efficiency index data calculated through the SBM model and uses the difference-in-difference method (DID) to estimate the impact of environmental regulations on ecological efficiency. We find that the implementation of environmental protection tax has improved urban ecological efficiency, but this effect is mainly reflected in the central and western regions. Further analysis shows that the improvement of ecological efficiency through environmental protection tax is mainly attributed to the upgrading of industrial structures. The research results of this article provide evidence for achieving an environmentally friendly society and sustainable development.