Regional carbon dioxide emissions study is necessary for China to realize the emissions mitigation. An environmental input–output structural decomposition analysis (IO-SDA) has been conducted in order to uncover the driving forces for the increment in energy-related carbon dioxide emissions in Xinjiang from both production and final demands perspectives from 1997 to 2007. According to our research outcomes, emissions increase can be illustrated as a competition between consumption growth (per capita GDP) and efficiency improvement (carbon emission intensity). Consumption growth have caused an increase of 109.98 Mt carbon dioxide emissions during 1997 to 2007, and efficiency improvement have caused a 97.03 Mt decrease during the same period. Per capita GDP is the most important driver for the rapid emission growth, while carbon emission intensity is the significant contributor to offset these increments. In addition, production structure changes performed as a new major driver for the steep rise in carbon dioxide emissions in recent years (2002–2007), indicating that the rapid emission growth in Xinjiang is the result of structural changes in the economy making it more carbon-intensive. From the viewpoint of final demands, fixed capital formation contributed the highest carbon dioxide emission, followed by inter-provincial export and urban residential consumption; while inter-provincial imports had the biggest contributions to offset emission increments. Based on our analysis results, Xinjiang may face great challenges to curb carbon dioxide emissions in the near future. However, several concrete mitigation measures have been further discussed and then raised by considering the regional realities, aiming to harmonize regional development and carbon dioxide emissions reduction.