Introduction. As competition for human capital intensifies, the quality of the urban environment becomes a key factor determining the attractiveness of territories for living and doing business.  A comfortable urban environment creates favorable conditions for the development of small and medium-sized enterprises (SMEs). The relevance of the study is due to the need to identify quantitative parameters and mechanisms of this relationship. Purpose. To investigate the relationship between the quality of the urban environment and the development of small business in the regions of the Russian Federation, to determine the character and strength of the influence of the environment on the efficiency of SMEs. Materials and methods. The methodological framework includes correlation, cluster, comparative and content analysis. Data from the Urban Environment Quality Index of the Ministry of Construction of the Russian Federation for 2024, statistical compilations of Rosstat, ratings of RIA Rating, VEB.RF, as well as data from specialized Internet resources were used. Results. A stable positive relationship between the quality of the urban environment and SME indicators was revealed. The strongest correlation is with the turnover of small enterprises per capita (R=0.74). Using clustering, four types of regions were identified, including the phenomenon of “compensatory” SMEs (high employment with low efficiency). A detailed analysis of the Southern Federal District confirmed the presence of leading regions, regions with unrealized potential, and “compensatory” territories. Conclusions. The quality of the urban environment significantly affects the efficiency of SMEs,  and not just the scale of employment. A differentiated approach to supporting regions is needed depending on the identified type. Investments in improvement and “framework” infrastructure should be synchronized with business development programs to achieve a synergistic effect.