Abstract: Digital technology is an important technical support for the digital economy. How to improve the level of enterprise digital technology innovation has become an important topic for all circles of society. Based on the data of China's A-share listed enterprises from 2009 to 2020 and the text data of provincial government work reports, this paper explores the impact of digital economy policies on enterprises' digital technology innovation and its internal mechanism. The research finds that, first, digital economy policies can promote the improvement of enterprises' digital technology innovation level, and mainly promote the increase of digital technology innovation quantity, but the improvement effect on the quality of digital technology innovation has not been shown. Second, mechanism analysis shows that digital economy policies promote enterprise digital technology innovation mainly by improving the regional business environment and reducing the financing constraints of enterprises. Third, the heterogeneity test of the external environment of enterprises shows that the digital economy policy promotes the digital technology innovation of enterprises in the eastern and central regions, provincial capitals and regions with high digital financial development level. The internal feature heterogeneity test shows that the digital technology innovation of non-state-owned enterprises, large-scale enterprises and manufacturing enterprises is more affected by the government's digital economy policy. This paper expands the depth and breadth of the study of digital economy policies on enterprise digital technology innovation, reveals the diversity and complexity of policy functions, provides useful experience and inspiration for future policy formulation and implementation, and helps promote the long-term development of digital economy.