Abstract: Correcting the distortion of labor factor prices is an important step toward improving total factor productivity and achieving high-quality employment, and intelligent manufacturing has begun to reduce the existing severe distortion of labor prices. This study first examines the mechanisms by which intelligent manufacturing and environmental pollution affect labor price distortion. Then, it tests these effects using a two-way fixed effects model, a generalized spatial two-stage least squares method, and an interactive fixed effects model with panel data from 30 Chinese provinces (including autonomous regions and municipalities) between 2006 and 2020. The results show that intelligent manufacturing can significantly alleviate labor price distortion, and this finding still holds after a series of robustness tests. Environmental pollution plays a partial mediating role in the process through which intelligent manufacturing mitigates labor price distortion. That is, environmental pollution itself does not mitigate this distortion, but it strengthens the mitigating effect of intelligent manufacturing. At present, intelligent manufacturing alleviates labor price distortion mainly through the mediating effect of carbon dioxide emission reduction.