The establishment of free trade zones (FTZ) is an important way for China to deepen reform and open up, and it is also a key link in achieving the dual carbon goals. As a highland for institutional innovation, the establishment of FTZ has laid a solid foundation for the steady development of the industrial economy and the achievement of national dual carbon goals. This article collected data on China’s FTZ establishment from 2010 to 2021 and matched it with urban environmental pollution datasets to investigate the impact of FTZ establishment on urban environmental pollution. The research results found that the establishment of FTZ has reduced urban environmental pollution, but this effect is mainly reflected in non resource-based cities and regional central cities. Further research has found that the role of FTZ establishments in reducing environmental pollution can be attributed to industrial structure upgrading and technological innovation. This article provides a reference for achieving coordinated development between cities and FTZ and better leveraging the role of FTZ in achieving green development.