This research investigates the impact of the digital economy on sustainable development in China, using panel data from 268 cities over the period 2011 to 2020. The study employs fixed panel models, difference-in-differences models, mediating effect models, and threshold models to analyze the relationship between the digital economy and sustainable development. Key findings include: 1. **The Digital Economy Promotes Sustainable Development**: The digital economy significantly stimulates sustainable development, particularly through the promotion of green innovation. 2. **Green Innovation as a Mediating Variable**: Green innovation acts as a mediating mechanism, enhancing the positive impact of the digital economy on sustainable development. 3. **Non-linear Relationship**: The relationship between the digital economy and sustainable development is non-linear, with diminishing returns as the level of digital economy development increases. 4. **Regional Heterogeneity**: The impact of the digital economy on sustainable development varies across regions, with eastern coastal cities showing higher levels of development and greater benefits. 5. **Robustness Tests**: The findings are robust, as confirmed by various robustness checks, including variable replacement, lag regression, and an external shock test using the "Broadband China" policy. The study provides insights into how regions can promote sustainable development in the digital age and suggests that the "Broadband China" policy has a positive effect on sustainable development. Future research could expand the analysis to other countries and integrate the concept of sustainable development with the United Nations' 17 Sustainable Development Goals.This research investigates the impact of the digital economy on sustainable development in China, using panel data from 268 cities over the period 2011 to 2020. The study employs fixed panel models, difference-in-differences models, mediating effect models, and threshold models to analyze the relationship between the digital economy and sustainable development. Key findings include: 1. **The Digital Economy Promotes Sustainable Development**: The digital economy significantly stimulates sustainable development, particularly through the promotion of green innovation. 2. **Green Innovation as a Mediating Variable**: Green innovation acts as a mediating mechanism, enhancing the positive impact of the digital economy on sustainable development. 3. **Non-linear Relationship**: The relationship between the digital economy and sustainable development is non-linear, with diminishing returns as the level of digital economy development increases. 4. **Regional Heterogeneity**: The impact of the digital economy on sustainable development varies across regions, with eastern coastal cities showing higher levels of development and greater benefits. 5. **Robustness Tests**: The findings are robust, as confirmed by various robustness checks, including variable replacement, lag regression, and an external shock test using the "Broadband China" policy. The study provides insights into how regions can promote sustainable development in the digital age and suggests that the "Broadband China" policy has a positive effect on sustainable development. Future research could expand the analysis to other countries and integrate the concept of sustainable development with the United Nations' 17 Sustainable Development Goals.