Editor's Summary: A growing body of research attributes China's environmental problems to weak regulatory enforcement. Few studies, however, have explored the relationship between institutional capacity and regulatory enforcement. In this Article, Wanxin Li and Eric Zusman draw upon the literature on state capacity and institutional analysis to fill this void. The Article reveals that local environmental protection bureaus with greater human capital--though not necessarily greater financial resources--enforce regulations more rigorously. The Article also shows that these efforts do not necessarily lead to cleaner air or water. Regions with industries that have a greater capacity to abate pollution tend to pollute more, offsetting the potentially beneficial effects of stronger regulatory enforcement. The authors therefore conclude that it may take more than just innovative regulations to translate regulatory promise into environmental progress.