Abstract: Improving the level of corporate green innovation is an important way to achieve high-quality development. Taking the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2020 as a sample, the impact of institutional investor’s exit threat on corporate green innovation was examined. It is found that institutional investor’s exit threat will promote corporate green innovation. Moreover, with institutional investors’ shareholding ratio as threshold variable, there is a single-threshold effect of exit threat on corporate green innovation, and the positive effect of exit threat is revealed when the shareholding ratio of institutional investors exceeds the threshold value. Further mediating analysis shows that institutional investor’s exit threat will motivate firms to increase R&D investment and actively fulfill their environmental responsibilities. In addition, the green innovation empowerment effect of institutional investor’s exit threat is more significant when institutional investors are stress-resistant and firms are non-state in nature or in heavy pollution industries.