Regional inequality has challenged the equity and justice, which influences the nation-wide sustainability. One purpose of this paper is to measure China's regional disparity for two selected indices, GDP and CO₂ emissions, from both economic and environmental points of view. Anotherpurpose is to diagnose factors causing the differences of regional development and to provide implications for regional sustainability. For the measuring of regional disparity, we apply Theil index method. For the factor decomposition, we use shift and share analysis. The major findings are: 1) China's regional GDP inequality is dominated by the inter-regional inequality . 2) The central and western regions keep higher CO₂ emission intensities while their economies are lessdeveloped. 3) The strengthening of regional specialized sectors and enhancement of sectoral fuel consumption efficiency are conducive to the regional sustainable development .