Continuous improvement of urban wastewater treatment efficiency (UWTE) requires effective government supervision and increased private capital. However, it is unknown to what extent this public-private partnership (PPP) can improve the UWTE. We collected data from 1,303 urban wastewater treatment PPP projects in 283 prefecture-level cities in China from 2014 to 2019. These data were analysed using data envelopment analysis (DEA) and Tobit regression model to evaluate the effect of the PPP model on the UWTE. The UWTE was significantly higher in prefecture-level cities that introduced the PPP model in the construction and operation of a wastewater treatment infrastructure, especially those with a feasibility gap subsidy, competitive procurement, privatised operation, and non-demonstration. Furthermore, PPPs’ effect on UWTE were limited by the level of economic development, marketisation, and climatic conditions. This study presents a model for the construction and operation wastewater treatment infrastructure in developing countries lacking public funds.