To control energy consumption, China issued the environmental regulation policy of the Top-1000 Energy-Saving Program in 2006, and it remains to be examined whether this policy will impact enterprises’ labor demand while promoting energy conservation and consumption reduction. Based on the panel data of Chinese enterprises (2000–2010), this study employs the difference-in-differences (DID) method to investigate the impact of the Top-1000 Energy-Saving Program on the labor demand of enterprises. It is found that the policy significantly reduces enterprises’ labor demand, a finding that passes several robustness tests. Second, the effects of the policy show heterogeneity across enterprises of various sizes, ownership structures, and regions. Finally, the mechanism analysis verifies the existence of an output effect leading to a decline in enterprises’ labor demand, while the substitution effect manifests itself in the substitution of enterprises’ labor demand with the increase of capital and technological innovation. This study provides important empirical evidence for the improvement of energy efficiency policies.