•The residential indirect CO2 emissions display regional difference.•We decompose the urbanization variable from the SDA model.•Urbanization increases residential indirect CO2 emissions in China.•Consumption structure increases residential indirect CO2 emissions in China. Based on analysis of input–output energy and household expenditure data (IO-EA-expenditure), this paper calculates China’s indirect carbon emissions from residential consumption in 2002 and 2007, by region. Then a new Structural Decomposition Analysis (SDA) model is proposed to investigate the regional variations of impacts of urbanization, consumption ratio and consumption structure on residential indirect CO2 emissions in China during 2002–2007. As the results suggest, expansion of urbanization and upgrade of consumption structure play important roles in the growth of residential indirect emissions. Transformation of consumption ratio, contributing the most to emissions in the eastern region, reduces indirect emissions in all regions to a certain extent. The persistent decline of carbon emission intensity still contributes significantly to the decrease in emissions and the rise of per capita consumption plays a dominant role in the growth of residential indirect emissions. Based on empirical results, this article provides policy suggestions which can help reduce China’s residential indirect CO2 emissions.