There is much discussion on the non-linear relationship between economic growth and carbon dioxide (CO₂) emissions. Additionally, the effects of Foreign Direct Investment (FDI) on the environment are ambiguous, as both beneficial (i.e., pollution-halo) and harmful (i.e., pollution-haven) effects were found. Therefore, the literature presents no consensus on either of these topics. This is especially problematic for developing regions, as these regions represent growing economies interested in receiving foreign investments, and their CO₂-related research is limited. This study aims to understand the impacts of economic growth and FDI on the CO₂ emissions of São Paulo state, Brazil. To perform this study, a unique dataset on regional FDI was built, and 592 municipalities were included. The analyses combine linear and non-linear estimations, and the results suggest a non-linear relationship between Gross Domestic Product (GDP) per capita and CO₂ emissions, along with a negative association between FDI and CO₂. Finally, this study discusses possible policy implications and contributes to the international literature.