Local　governments　restrict　cross-regional　flows　of　factors　and　products　for　achieving　the　purpose　of　profit,　which　lead　to　market　fragmentation.　China’s　domestic　market　is　fragmented,　leading　to　the　situation　that　market　boundaries　are　demarcated.　We　use　the　relative　price　method　to　measure　market　fragmentation　and　find　that　market　fragmentation　is　indeed　a　serious　problem　in　China.　This　study　evaluates　the　ecological　efficiency　using　the　bootstrap　DEA　method　that　takes　air　and　water　pollution　into　account　and　investigates　the　effect　of　market　fragmentation　on　ecological　efficiency　based　on　the　system　GMM　approach　by　employing　data　from　a　panel　of　29　provinces　in　China　during　the　period　2000–2015.　The　results　indicate　that　there　are　differences　in　ecological　efficiency　among　provinces.　The　market　fragmentation　has　negative　impact　on　ecological　efficiency,　which　shows　market　fragmentation　significantly　inhibits　the　improvement　of　ecological　efficiency.　The　similar　findings　are　confirmed　by　a　series　of　robustness　tests,　which　include　the　alternative　indicator　and　sub-sample　regression.　Based　on　the　above　findings,　the　central　government　should　reduce　market　fragmentation,　promote　market　integration,　increase　the　efficiency　of　resource　allocation,　and　improve　environmental　quality.　©　2019,　Springer-Verlag　GmbH　Germany,　part　of　Springer　Nature.