This study investigates the impact of the digital economy on sustainable development in China, using panel data from 268 cities between 2011 and 2020. The research explores the relationship between the digital economy, green innovation, and sustainable development, and finds that the digital economy significantly promotes sustainable development, with green innovation acting as a mediating and moderating factor. The study also confirms the positive effect of the "Broadband China" policy on sustainable development, enhancing the reliability of the results. The findings suggest that the digital economy can drive sustainable growth through technological innovation, resource efficiency, and environmental protection. The study constructs indicators for the digital economy and sustainable development, using the entropy method to measure these variables. The results show that the digital economy has a positive and non-linear effect on sustainable development, with green innovation playing a key role in mediating this relationship. The study also finds regional heterogeneity in the impact of the digital economy on sustainable development, with eastern regions showing a stronger effect. The research provides insights into how regions can leverage the digital economy to promote sustainable development, and highlights the importance of green innovation in achieving this goal. The study also addresses endogeneity issues through exogenous shock tests, using the "Broadband China" policy as a policy shock to examine the impact of the digital economy on sustainable development. The findings support the hypothesis that the digital economy promotes sustainable development through green innovation, and that the relationship is non-linear. The study contributes to the understanding of the digital economy's role in sustainable development, and provides a framework for future research in this area. The study also highlights the importance of policy interventions in promoting sustainable development, and the need for further research to address the limitations of the current study.This study investigates the impact of the digital economy on sustainable development in China, using panel data from 268 cities between 2011 and 2020. The research explores the relationship between the digital economy, green innovation, and sustainable development, and finds that the digital economy significantly promotes sustainable development, with green innovation acting as a mediating and moderating factor. The study also confirms the positive effect of the "Broadband China" policy on sustainable development, enhancing the reliability of the results. The findings suggest that the digital economy can drive sustainable growth through technological innovation, resource efficiency, and environmental protection. The study constructs indicators for the digital economy and sustainable development, using the entropy method to measure these variables. The results show that the digital economy has a positive and non-linear effect on sustainable development, with green innovation playing a key role in mediating this relationship. The study also finds regional heterogeneity in the impact of the digital economy on sustainable development, with eastern regions showing a stronger effect. The research provides insights into how regions can leverage the digital economy to promote sustainable development, and highlights the importance of green innovation in achieving this goal. The study also addresses endogeneity issues through exogenous shock tests, using the "Broadband China" policy as a policy shock to examine the impact of the digital economy on sustainable development. The findings support the hypothesis that the digital economy promotes sustainable development through green innovation, and that the relationship is non-linear. The study contributes to the understanding of the digital economy's role in sustainable development, and provides a framework for future research in this area. The study also highlights the importance of policy interventions in promoting sustainable development, and the need for further research to address the limitations of the current study.