This study investigates the impact of institutional quality on CO2 emissions in Central and Eastern European (CEE) countries between 1996 and 2020. The research reveals a quadratic relationship by analyzing key institutional indicators, such as political stability, rule of law, control of corruption, voice and accountability, government effectiveness, and regulatory quality. According to the research, CO2 emissions initially increase with institutional improvements but begin to decline after exceeding a threshold of 0.329. The findings emphasize the need for improved institutional quality to reduce CO2 emissions in CEE countries. The study recommends that governments enhance institutional quality by reinforcing the rule of law, improving governmental effectiveness, and implementing anti-corruption measures.