As a significant policy measure to protect the environment, environmental regulation can constrain enterprises’ production and operation activities in the long run. However, no clear conclusions have been made about the impact of environmental regulation intensity (ERI) on enterprises’ financial risk. This study tests the empirical relationship between ERI and manufacturing enterprises’ financial risk by using a bidirectional fixed effects model with listed manufacturing enterprises in China from 2012 to 2016. It is found that ERI has a significant negative effect on the financial risk of manufacturing enterprises, and this result remains significant after robustness tests. Further study finds that the effect of ERI on the financial risk of manufacturing enterprises is not significant in the sub-sample of private, low-polluting, and first-tier cities manufacturing enterprises; in the sub-sample of nonprivate, high-polluting, and non-first-tier cities manufacturing enterprises, ERI has a significant negative effect on their financial risk. Our discoveries provide empirical evidence and theoretical references for manufacturing enterprises to improve their ability to analyze the exogenous environment to avoid endogenous financial distress and provide intellectual support for the government to optimize environmental regulation policies.