Municipal solid waste (MSW) sorting not only reduces the total quantity of domestic waste but also has positive effects on urban air quality. In this study, using a careful identification strategy and air quality data at the monitoring station level in Shanghai, we estimate the causal effect of the MSW sorting policy on urban air quality. The results show that after the MSW sorting policy was implemented, the air quality index (AQI), nitrogen dioxide (NO2) and carbon monoxide (CO) decreased significantly by 2.71%, 2.07% and 3.62%, respectively. We also find a positive spillover effect from the Shanghai MSW sorting policy on the air quality of adjacent cities. The implementation of this policy has triggered changes in residents' behaviors. However, the government needs further efforts to maintain the sustainability of MSW sorting policies.