Abstract: “Peak Carbon, Carbon Neutrality” is a wide-ranging and profound systemic transformation of the economic and social system, which will bring about significant changes in the production and lifestyle of the whole society. This process relies on a large amount of capital investment. Green bonds, as an important component of the green financial system, can provide financial support for achieving green transformation and promoting green low-carbon development. In this study, national city-level data from 2006 to 2022 was used to empirically analyze the impact of green bond issuance on regional carbon emission reduction and its underlying mechanism. The study finds that the issuance of green bonds can significantly promote regional carbon emission reduction, a conclusion that still holds true after a series of robustness tests. Heterogeneity analysis results show that the carbon emission reduction effect of green bonds is stronger in the eastern region, followed by the central region, and this effect is more effective in areas with stronger environmental regulations. From the perspective of impact mechanisms, green bonds promote regional carbon reduction by increasing both government and public environmental concern. The conclusions of this study not only provide empirical evidence for a deeper understanding of the intrinsic relationship between green bond issuance and regional carbon emission reduction but also have important policy implications for seizing the carbon emission reduction opportunities brought by green bonds and effectively implementing regional “Peak Carbon, Carbon Neutrality” initiatives.