It might be rare enough in Indonesia to use an extended input output model in analysing regional economy and environment which are integrated in a single analytical method. The aim of the study is to identify the region’s leading sectors considering economic and environmental aspects, in particular carbon emissions, in an integrated manner. The method of analysis used is an extended input-output model. The main source of data used is the I-O Table and the report book of Greenhouse Gas Inventory of D.I Yogyakarta. The results of the analysis show that the leading sectors are selected namely the manufacturing industry; procurement of electricity and gas; transportation and warehousing; provision of accommodation and food products and beverages; and information and communication. The simulation results show that with the increase in the final demand of 17 economic sectors of D.I Yogyakarta by 25% in the next five years, the 5 leading sectors will contribute to the Gross Regional Domestic Product of D.I Yogyakarta of around IDR 14.93 trillion, but they will also produce the total of CO2e emissions of around 1,267.9 GgCO2e. The local government needs to develop these five leading sectors and also mitigate carbon emissions.