Japan and China have a long history of environmental cooperation. In recent years, economicpotential of environmental industry has been well recognized, besides the requirement of environmental protection. Both Japan and China have incorporated green growth into their dominant national strategies and set up high priority for promoting environment and energy relatedindustries, which serves as the background for further mutually beneficial cooperation. In thisarticle, we reviewed the history and found that Japan-China environmental cooperation hasdeveloped from government-oriented stage to business-oriented stage. It is more stable againstthe complex and volatile international political situation; but stable intergovernmental rela-tionship is one of the key factors for initiating environmental cooperation projects. Later, wediscussed the opportunities and challenges for Japan-China environmental cooperation con-sidering the roles of state actor and business power. A systematic scheme was concluded toanalyze the critical factors and dynamic relations for environmental cooperation and business.Business power has been exerting more and more influence on international and domestic environmental politics. Due to the political limitation of state actors, business power is expectedto be more active in promoting stable and sustainable cooperation. Moreover, environmentalcooperation could also be a key to mitigating the political tensions between Japan and China.