It was presumed that the passage of NAFTA would stimulate considerable growth in markets for environmental goods and services in Mexico, and the rapid development of an environmental industry in Mexico. This paper quantifies the growth and evolution of environmental market in Mexico since 1995, and characterizes the contribution of imports and Mexico’s own environmental industry. NAFTA has not brought proportionally more pollution to Mexico as many feared, but it is gradually bringing higher standards of environmental performance due to the influx of multinational firms operating under their own guidelines. The challenge is to turn these standards into the norm rather than the exception, and working with Mexican authorities to apply similar standards to their environmental infrastructure.