The　digital　economy　is　an　essential　engine　of　the　innovation-driven　development　strategy　and　plays　a　valuable　role　in　promoting　the　high-quality　development　of　the　regional　economy.　Based　on　the　panel　data　of　286　cities　in　mainland　China　with　the　help　of　the　digital　economy　strategic　plans　issued　by　local　governments　as　a　quasi-natural　experiment,　we　use　the　multi-temporal　double-difference　(DID)　method　to　examine　the　impact　of　the　digital　economy　on　the　urban　innovation　level.　Findings　show　that　the　digital　economy　can　significantly　improve　the　urban　innovation　level.　After　a　series　of　robustness　tests,　such　as　parallel　trend　test,　updating　sample　and　period,　and　repeated　placebo　test,　the　innovation-driving　effect　generated　by　the　development　of　the　digital　economy　remains　significant.　Results　of　the　mechanism　analysis　indicate　that　the　digital　economy　enhances　the　level　of　innovation　through　upgrading　industrial　structures.　In　addition,　we　find　through　the　heterogeneity　test　that　the　digital　economy　has　a　stronger　effect　on　improving　the　quality　of　innovation.　Meanwhile,　the　innovation　output　in　the　Middle　Eastern　region　is　more　significantly　affected　by　the　“Digital　China”　strategy　than　the　Western　region.　Therefore,　we　should　accelerate　the　implementation　of　the　local　digital　economy　development　strategy　to　realize　the　high-quality　development　of　the　regional　economy.　©　The　Author(s)　2024.