Reducing urban carbon emissions efficiently achieves green, low-carbon, and sustainable development goals and mitigates climate change. This paper aims to assess the impact and mechanism of China’s innovative low-carbon pilot policy on carbon emissions. Based on a sample of 212 cities in China from 2003 to 2016, this paper investigates the impact of low-carbon pilot policy on urban carbon emissions using the DID technique. The findings reveal that pilot cities cut carbon emissions considerably by roughly 24.5% compared to non-pilot cities when the policy is implemented. This reduction remains significant after several robustness tests. Additionally, the low-carbon pilot policy reduces urban carbon emissions primarily through investments in technological innovation, energy conservation, carbon sinks, and environmental governance. In contrast, the impact of industrial restructuring on reducing urban carbon emissions is currently insignificant. Regarding differences between regions, the east region and high-quality cities have a greater impact on reducing carbon emissions. In addition to helping China reach its “peak carbon” and “carbon neutral” objectives, lowcarbon pilot initiatives have served as a model for other nations and regions looking for ways to reduce their carbon emissions.