Generally, one of the important factors affecting development of controlled environment agriculture, is related to external environment factors which are out of the control of producer’s individual management. The main purpose of this study was to investigate the impact of effective external environment on development of CEA in Tehran and Alborz provinces (N=74). The data gathering tool of the research was a researcher-designed questionnaire, its validity was confirmed by a panel of experts and its reliability was confirmed by Cronbach’s alpha (0.797- 0.916). The collected data were analyzed by structural equation modeling with partial least squares method (PlS-SEM) with smart PLS software. The findings showed that all dimensions of external environment affect CEA development with 99% confidence. Also, according to the beta standard values, it can be said that the three structures items including supporting system, structures and procedures, and business situation have the highest effects and the other two items including policies and laws and financial and managerial facilities have the lowest effects on CEA development, respectively.