The study of the impact of the carbon trading market on enterprises’ total factor productivity (TFP) is of great significance for enterprises’ sustainable corporate development and high-quality economic growth. This paper utilizes data from A-share listed companies from 2010 to 2020 and the differencein- differences method to verify the impact of carbon trading on enterprises’ TFP and its mechanisms. The research findings indicate that carbon emission trading has significantly enhanced enterprises’ TFP, with this conclusion remaining valid even after endogenous and robustness tests. Carbon emission trading makes corporate capital more efficient, improving TFP by enhancing research and development and investment efficiency. For firms with low equity concentration, capital-intensive, and technologyintensive firms, the positive effect of carbon trading on TFP is more significant, while for firms with low equity concentration and labor-intensive firms, this impact is not significant. Finally, the carbon trading price has a regulatory effect; that is, the high price is not conducive to improving enterprises’ TFP by carbon emission trading. These findings theoretically enrich the research results of the carbon trading market and practically provide new perspectives and theoretical support for promoting the development of the carbon market and proposing policies for sustainable corporate development.