This study examines whether financial development contributes to haze pollution reduction. In a Partially Linear Functional-Coefficient (PLFC) model, we use a prefecture-level panel to analyse the influential mechanism of financial development on haze pollution by constructing the comprehensive index of urban financial development from three dimensions of financial scale, financial efficiency and financial structure. The results indicate that financial development significantly contributes to haze pollution reduction, both in terms of financial scale and financial efficiency. The role of financial structure is uncertain. Moreover, the impact of financial development on smog is nonlinear in regional changes. We also find that innovation and environmental regulation can significantly promote the impact of financial development on haze governance. These results suggest different channels through which financial development affect smog.