As the largest carbon emitter in the world, China is confronted with great challenges of mitigating carbon emissions, especially from its construction industry. Yet, the understanding of carbon emissions in the construction industry remains limited. As one of the first few attempts, this paper contributes to the literature by identifying the determinants of carbon emissions in the Chinese construction industry from the perspective of spatial spillover effects. A panel dataset of 30 provinces or municipalities from 2005 to 2015 was used for the analysis. We found that there is a significant and positive spatial autocorrelation of carbon emissions. The local Moran`s I showed local agglomeration characteristics of H-H (high-high) and L-L (low-low). The indicators of population density, economic growth, energy structure, and industrial structure had either direct or indirect effects on carbon emissions. In particular, we found that low-carbon technology innovation significantly reduces carbon emissions, both in local and neighboring regions. We also found that the industry agglomeration significantly increases carbon emissions in the local regions. Our results imply that the Chinese government can reduce carbon emissions by encouraging low-carbon technology innovations. Meanwhile, our results also highlight the negative environmental impacts of the current policies to promote industry agglomeration.