Manufacturing　servitization　is　an　effective　way　to　improve　both　environmental　performance　and　economic　benefits　in　developing　countries.　In　this　paper,　we　first　propose　the　firm-level　manufacturing　servitization　(FMS)　measurement　method.　Then,　based　on　Chinese　firm-level　data　for　2000-2015,　we　take　low-carbon　city　pilot　(LCCP)　policy　implementation　as　a　quasinatural　experiment　to　investigate　the　effect　of　low-carbon　city　governance　on　FMS.　The　propensity　score　matching-difference-in-differences　(PSM-DID)　model　results　indicate　that　the　construction　of　LCCP　policy　could　significantly　improve　FMS.　In　addition,　we　explain　the　promoting　effect　of　low-carbon　city　governance　on　FMS　by　enhancing　innovation　intensity　and　promoting　pollution　factor　substitution.　Specifically,　low-carbon　city　governance　increases　the　innovation　intensity　of　enterprises　and　promotes　service　factors　as　substitutes　for　other　pollution　production　factors,　changing　the　service　factor　input　structure.　Furthermore,　by　dynamically　decomposing　aggregate　FMS　growth,　we　found　that　LCCP　policy　generates　a　positive　within-firm　effect　for　surviving　enterprises.　However,　the　role　of　the　resource　reallocation　effect　has　not　been　fully　explored.　Based　on　the　findings,　this　study　offers　more　theoretical　backing　and　empirical　substantiation　for　developing　countries＇　pursuit　of　simultaneously　achieving　sustainability　and　economic　growth　under　environmental　regulations.