Based on the data of f listed firms in the Ashare of Chinese stock market from 2008 to 2011, this paper examines the relationship between the regional audit market concentration and the audit quality as well as the moderating effect of outside institutional environments. The results indicate that the regional audit market concentration is negatively related to the audit quality in the experimental sample of the control group, but the negative moderating effect of such institutional environments is not significant in a better institutional environment. A further study finds a positive relationship between the audit market concentration and the audit quality. Therefore, the result again shows that institutional environment plays a negative regulation role in the above relationship.