This article makes use of the system GMM and the threshold panel system to study the relationship between fiscal decentralization and environmental governance performance based on the panel data of 30 provinces (municipalities and autonomous regions) from 2007 to 2016 in our country. The conclusion shows that: from the perspective of the system GMM test, the fiscal decentralization of the national sample has a significant negative effect on environmental governance performance, and has regional differences, of which the eastern region is positive and the central and western regions are negative. From the threshold effect, fiscal decentralization has a significant single threshold effect on environmental governance performance. From the perspective of discretionary income, it shows that regardless of the level of decentralization of the discretionary income, there is a negative impact. When the income decentralization is low, there is a negative impact; when the income decentralization is high, the negative impact is not significant. The perspective of expenditure shows that when the decentralization of expenditure is low, the negative impact is not significant; when the decentralization of expenditure is high, there is a negative impact. Finally, based on the empirical conclusions, we put forward some policy implications.