Increasing attention and concern over the impacts of environmental issues on business has led a number of companies to actively manage these impacts, especially after increasing the pressure of environmental legislation and stakeholders of companies. Therefore, the main goal of this research was to assess the state of environmental practice in Egyptian companies after enacting the environmental law (no. 4 of 1994) and the implications of such practice on the demand for environmental auditing. A questionnaire survey was conducted involving four industrial sectors in Egypt. The questionnaire was designed to assess: (1) the impact of environmental legislation on Egyptian companies; (2) the perception on characteristics of environmental auditing conceived by companies; (3) the impact of environmental legislation on the demand for environmental auditing. The findings indicate that environmental issues have a strong impact on business and their importance is increasing in Egypt. A number of companies provided examples of legitimation, such as a written environmental policy statement, environmental management systems and environmental audits carried out to comply with regulations. Environmental awareness within companies in Egypt still needs to be raised. The demand for environmental auditing in Egypt is limited.