Empowering industrial green development with the digital economy represents a crucial approach to advancing the green transformation of China’s economy and achieving high-quality economic development. Based on panel data from 279 cities in China from 2011 to 2021, this article uses the spatial econometrics model and threshold effect model to explore the spatial effect and nonlinearity of digital economy (DE) on industrial green development (IGD). The results show that, both DE and IGD exhibit fluctuating upward trends in China. There exists stronger spatial linkage effect in the eastern coastal areas, but this effect is weaker in the central and western regions. Furthermore, DE has significantly promoted IGD, and the conclusion remains robust after a series of endogeneity and robustness tests. Additionally, the promotion of the DE for IGD is characterized by regional spillovers and non-linear dynamics. The research results can serve as a theoretical support and decision-making basis for China to enhance industrial green development, promote the construction of an ecological civilization, and implement sustainable development strategies.