Since there is a lot of discussion and attention focused on green economic efficiency, the central government has prioritized the sustainable development of the urban economy. Utilizing the fuzzy set qualitative comparative analysis (fsQCA) and necessary condition analysis (NCA) methodologies based on sample data from 276 Chinese cities in 2021, this study examines the institutional configurations that influence urban green economic efficiency. The findings show that environmental regulations, environmental subsidies, green credit, the green equity market, and the level of enterprise intelligence cannot individually constitute the required conditions for determining urban green economic efficiency. However, they form four institutional configurations that enable cities to attain high levels of green economic efficiency. The study provides useful insights for sustainable development by thoroughly revealing the intricate causal links between numerous institutional aspects and urban green economic efficiency.