The broad intent of smart growth is to reduce development in environmentally sensitive areas by limiting the outward expansion of development and redirecting private investment to urban areas. Local decisions that shape and constrain land uses can pit narrow economic interests against broader-based environmental organisations and impact decisions on smart growth. Based on the political market framework, this study specifically examines the influence of pro-growth and smart-growth interest groups on smart growth policies adopted by local governments in the state of Massachusetts, USA. The results suggest both real estate interests and environmental groups influence local policy decisions, and depending on the policy, the characteristics of local political institutions mediate these influences.