As a new approach to construction practice, modular construction allows the building to be split into modular units and prefabricates them in factories, transports the units to the site, and assembles them into the whole construction through reliable connections. Whilst it is regarded to be the future direction in the development of the construction industry, Hong Kong and Singapore, amongst many other cities, both use modular constructions in public and private constructions. There have been many evaluations of the sustainability performance of a single construction using modular constructions, but the environmental impacts of implementing modular constructions on a city scale have been rarely explored. Few scholars have studied the impact of the application of this technology on the air quality on a small regional scale. Therefore, this study aims to fill this gap by comparing and analysing the modular construction policies in Hong Kong and Singapore and evaluating the impact of the policies on air quality in the two cities. By using OLS and DID analysis, we found that the air quality can be affected by modular construction, though the impact was found to be limited. The modular construction policies had a positive effect on sulphur dioxide (SO2) emissions in both cities, and a negative effect on nitrogen dioxide (NO2) and particulate matter < 10 μm (PM10) emissions. Meanwhile, greenhouse gases (GHG) and ozone (O3) varied between the two.