Eco-efficiency of the transport sector is a novel idea of high importance for reduced environmental pollution and sound resource use in Nairobi City. An assessment of transport eco-efficiency of the 11 sub-counties of the city was carried out for the period between June 2019 and May 2020 by examining the overall transport eco-efficiency levels, specific sub-regional variability in the efficiency and factors affecting efficiency. To realize this, a combined PCA-DEA-MLR approach is applied. The empirical results of the study indicate that the overall transport eco-efficiency of the 11 sub-counties is 0.67, with only Makadara sub-county being optimally efficient while most being moderately efficient to highly inefficient. This result indicates that the development of the transport sector in the city significantly harms the environment and human well-being. The findings also show that the amount of wage and number of employees had a noteworthy positive impact on transport eco-efficiency while fuel consumption, traffic volume, transport share of the Gross County Product (GCP) and transport attributed particulate matter pollution had a notable negative impact on transport eco-efficiency of sub-counties in the city. Several factors that affect transport eco-efficiency were noted and recommendations made for enhancing the transport eco-efficiency thus higher quality of life for Nairobi City residents and overall sustainable development.