Abstract: Along with the rapid growth of Chinese economy, the problem of environmental deterioration has been increasingly serious. As the primary environmental polluters, enterprises should have borne the responsibility of environmental governance and strengthened the green technology innovation. However, due to the externalities of environment protection, enterprises are often reluctant to participate in green innovation. The Green Credit Guidelines (GCG) promulgated in 2012 is a significant institutional arrangement for the environment protection in China, which highlights bank credit as an important tool of environment protection. Specifically, the GCG requires financial institutions to pay more attention to the environmental risk and social risk of enterprises. As an important measure to adjust the credit resources, the fundamental purposes of the GCG are to improve the quality of the environment and promote the green transformation of the industry. Therefore, it is significant to analyze the impact of the GCG on enterprise green innovation. However, most studies on the GCG mainly focuses on theoretical discussion and effect evaluation, and there is little evidence about whether and how the GCG influences enterprise green innovation. Using the promulgation of the GCG as a quasi-natural experiment, this paper investigates the impact of the green credit policy on the green innovation of heavily polluting enterprises with the help of difference in difference method. Compared with other study on the relationship between environmental regulation and green innovation of enterprise, this paper avoids endogenous problem among variables. In addition, this paper enriches the enterprise green innovation factors and the GCG environmental consequences of the relevant literature, which also helps to the following promotion of the green credit policy and the construction of green finance. The conclusions of this paper are as follows: First, the GCG has a significant negative impact on the green innovation of heavily polluting enterprises, and this relationship is robust to different specifications and alternative measures. Second, the reduction of credit scale and the increase of credit cost are possible channel. Third, the heterogeneity analysis shows that the negative net effect of the GCG on enterprise green innovation is more pronounced in the green invention patents and enterprises that are not state owned or do not have large scale. Based on the above conclusions, this paper suggests the government should pay attention to the policy distortion, establish the incentive mechanism for green credit and promote the environmental information resource sharing.