Economic compensation has been documented in many studies globally as an important strategy for enhancing acceptance by local residents of potentially hazardous facilities. Based on attribution theory, the present study investigates the situation for Waste-to-Energy (WTE) incineration plants using a questionnaire survey conducted with adjacent residents to four selected WTE incineration plants located in the Yangtze River Delta region, China. The results indicate that economic compensation effectively improves residents’ acceptance by being positively associated with their perceived economic benefit and trust in the local government, but is negatively associated with their perceived risks. Of these, trust plays the most vital role. The findings contribute to the literature on decision-making of locally unwanted land use siting in China by understanding the effects of economic compensation on local resident acceptance; and is of great significance for other countries involved in establishing sustainable municipal solid waste disposal systems of their own.