There　is　a　lack　of　studies　on　whether　market　distortions　inhibit　the　ecological　efficiency.　This　study　introduces　the　ecological　efficiency　based　on　the　bootstrap-data　envelopment　analysis　(DEA)　method　as　the　indicator　of　environmental　performance　in　China,　uses　the　transcendental　logarithmic　production　function　to　calculate　factor　price　distortion,　and　further　identifies　whether　the　factor　price　distortion　has　a　negative　impact　on　the　ecological　efficiency　using　the　system　generalized　method　of　moments　(GMM)　method.　Meanwhile,　institutional　quality　is　considered　a　threshold　variable　to　examine　the　relationship　between　factor　price　distortion　and　ecological　efficiency　based　on　the　threshold　model.　The　result　shows　that　factor　price　distortion　significantly　inhibits　the　improvement　of　ecological　efficiency.　Moreover,　institutional　quality　is　considered　to　be　the　threshold　of　factor　price　distortion　affecting　ecological　efficiency.　Further　investigation　of　heterogeneity　effect　suggests　that　the　inhibitory　impact　of　factor　price　distortion　on　ecological　efficiency　is　more　significant　in　the　central　and　western　regions.　This　study　provides　a　supplement　to　the　study　on　environmental　performance　from　the　perspective　of　factor　distortions　and　expands　the　framework　of　the　influence　mechanism　of　factor　price　distortion　affecting　ecological　efficiency.　©　2019,　Springer-Verlag　GmbH　Germany,　part　of　Springer　Nature.