The booming digital economy has injected new momentum into the high-quality development of China’s economy. This paper empirically examines the impact of the digital economy and environmental regulation on green development in China by using the SBM-GML model to measure the level of green development in Chinese cities using data from 282 prefecture-level cities in China from 2011- 2019 and explains the mechanism of the digital economy and environmental regulation on the green development of cities. The results show that the digital economy significantly improves the level of green development in Chinese cities and plays a positive moderating role in the process of environmental regulation to improve the level of green development in Chinese cities. Industrial structure upgrading is an important mediator of the digital economy and environmental regulation in empowering green total factor productivity; in terms of heterogeneity, both the digital economy and environmental regulation significantly increase the level of green development in cities in southern China and resource-based cities. In contrast, the digital economy and environmental regulation are the main drivers for non-digital economy pilot cities and non-resource cities, respectively.