Abstract: With the rapid development of the digital economy, it is of great significance to explore the impacts and the mechanism of the digital economy on environmental pollution for promoting the high-quality development of the Yangtze River Economic Belt. Based on the panel data of 40 prefecture-level and above cities along the Yangtze River Economic Belt from 2011 to 2019, this paper explored the interaction mechanism of innovation level between digital economy and environmental pollution. The threshold effect model was used to analyze the nonlinear relationship and the effect range. The spatial spillover effect of digital economy using spatial Durbin model was further studied. The results showed that: (1) The digital economy had a significant inhibitory effect on local environmental pollution. This conclusion was still valid after a variety of robustness tests. (2) The innovation level was an important path for the digital economy to affect environmental pollution. When the innovation level exceeded the threshold value of 6.41, the impact coefficient of the digital economy on environmental pollution changed from -0.024 to -0.042, showing a marginal increasing pollution control effect. (3) While curbing local environmental pollution, the spatial spillover effect of the digital economy would exacerbate the pollution emissions in the surrounding areas. The expansion of the production scale might become the cause of increased pollution, and the inhibition effect was covered by the pollution growth, caused by the expansion of the production scale. Therefore, it is necessary to strengthen inter-regional collaborative governance to avoid dilution of the pollution control effect of the digital economy by unreasonable production scale.