<p>Strict environmental regulations (ERs) may restrict enterprise activities and macroeconomic development, and thus affect the income distribution pattern of citizens in cities and villages in the country. To statistically explore the actual and special effect of ERs on income inequality, a panel threshold model is applied to check the nonlinearity of ERs-income inequality nexus, and the conclusion is verified by using robustness tests. In addition, whether the 12th Five-Year Plan, which focuses on ecological protection, will have a differentiated effect on the ERs-income inequality nexus is further discussed. We discover that: (1) both ERs and income inequality show substantial spatiotemporal features. Among them, the imbalance of ERs in each province is relatively prominent. Income inequality has gradually eased, and inequality is more severe in the west than in the east. (2) Significant threshold effect is found in ERs-income inequality nexus; specifically, ERs and income inequality show an inverted “U” type, that is, only after pollution investment reaches the threshold value can ERs become an essential driver to accomplish a purpose of national prosperity. (3) Prior to the 12th Five-Year Plan, ERs produce a modest influence on income gap. While after the emphasis on ecological civilization in the 12th Five-Year Plan, the improvement of pollution investment has become a powerful means for ERs to alleviate income inequality.</p>