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This paper analyzed the total factor productivity of Shandong Province and its impact on the local economic environment through Malmquist-Luenbetger productivity index. The results of the paper were included as follows. Without consideration of the environmental constraints, Index M of the total factor productivity of Shandong Province from high to low was Heze, Jinan, Qingdao, Weihai, Dongying, Zaozhuang, Jining, Tai'an, Dezhou, Liaocheng, Yantai, Zibo, Weifang, Linyi, Binzhou, Rizhao, Laiwu, among which Index M of Linyi, Binzhou, Rizhao, Laiwuwere were less than 1; taking the environmental constraints into account, Index ML of the total factor productivity of Shandong Province was reduced, from high to low was Jinan, Qingdao, Weihai, Yantai, Heze, Liaocheng, Tai'an, Weifang, Jining, Linyi, Zibo, Dongying, Zaozhuang, Rizhao, Laiwu, Binzhou, Dezhou, among which Index ML of 9 cities behind Jining were less than 1. In terms of the development mode, Jinan, Qingdao, Tai'an, Weihai, Jining and Heze were resource-conserving and environment-friendly cities; Dongying and Zaozhuang were resourceconserving and environment-polluted cities; Liaocheng, Linyi, Weifang and Yantai were resource-wasted and environment-friendly cities; Binzhou, Dezhou, Laiwu, Rizhao and Zibo were resource-wasted and environment-polluted cities. [ABSTRACT FROM AUTHOR]