The aim of this study is to examine the effect of FDI on environmental degradation and economic growth in three Balkan countries and eight economic sectors, for the period 2010. to 2019. For that purpose, logarithmic model – two-dimensional linear model and Pearson correlation were applied. Carbon dioxide (CO2) emissions are used as pollution variable. The results reveal that FDI have a positive effect on economic growth in certain economic sectors, thus, Considering different trends in the observed countries for the dependence of CO2 emissions and economic growth, it was not possible to confirm the EKC hypothesis. This study represents a contribution to a very scarce number of studies regarding the impact of FDI on the environment in the Balkan countries. The results of this study can be useful to policy makers. In general, the conclusion is that the observed countries must pay more attention to environmental legislation as well as legislation in the field of foreign investments, and try to attract as many “clean” investors as possible.