New technologies empower enterprises to undergo digital transformation and development，which has a significant impact on micro enterprise innovation activities，especially green innovation activities，and thus plays an important role in urban renewal. This article explores the impact of digital transformation on urban green innovation and its underlying mechanism based on micro enterprise data from 2007 to 2019. Research shows that digital transformation has indeed significantly promoted the level of green innovation in cities. In particular，deepening the promotion of digital transformation and development can significantly enhance the original，collaborative，and stable effects of urban green innovation. Mechanism analysis shows that digital transformation and development not only promote enterprise technological innovation and progress；It also improves corporate value and financial stability，ultimately promoting urban green innovation. Furthermore，there is significant heterogeneity in the impact of digital transformation development on urban green innovation among different enterprises’ “property rights attributes”，“technology intensive attributes”，and differences in total factor productivity and enterprise value. Among non-state-owned enterprises and technology-intensive enterprises，the promotion effect of digital transformation on urban green innovation is more significant；Whether in enterprises with different levels of total factor productivity or in enterprises with different levels of enterprise value，the promotion effect of digital transformation on urban green innovation is significant，but there are differences in the intensity of its impact. The research conclusion of this article provides reliable empirical evidence and policy inspiration for achieving digital transformation driving high-quality urban development and improving the urban green innovation policy framework.