Abstract: Promoting the upgrading of agricultural industrial structure in the era of digital economy is the key to the transformation of China from a large agricultural country to a strong agricultural country. Using the panel data of 261 prefecture-level cities in China from 2011 to 2020, this study empirically examines the effect of digital economy on the upgrading of agricultural industrial structure and its functioning mechanism by using the fixed effect model, the mediation effect model and the threshold effect model. The results show that:1) digital economy significantly promotes the upgrading of agricultural industrial structure, and has a positive effect on the rationalization and advancement of agricultural industrial structure; the empowering effect is better in prefectures with low administrative levels and non-main grain producing areas.2) digital economic development helps to promote the innovation of agricultural technology and the transfer of agricultural labor force, which significantly promotes the rationalization and advancement of the agricultural industrial structure; compared with the innovation of agricultural technology, the digital economy can help to promote the upgrading of agricultural industrial structure and the development of the agricultural industry. Compared with agricultural technological innovation, the indirect effect of labor force transfer is greater. 3) There is a double threshold for agricultural technological innovation in the digital economy to enable the advancement of the agricultural industrial structure, and its conduction effect shows a U-shaped characteristic of decreasing first and then increasing; there is a single threshold for the transfer of agricultural labor force, and the greater the number of transfers, the greater the effect of the transfer on the rationalization and advancement of the agricultural industrial structure. There is a single threshold for the transfer of agricultural labor, and the higher the number of transfers, the stronger the conduction effect on the rationalization and advancement of the agricultural industrial structure. The innovations and marginal contributions are mainly reflected in the following: firstly, it enriches the research on the related fields of digital economic empowerment, and empirically explores the impact effect and heterogeneity characteristics of digital economic empowerment on the upgrading of agricultural industrial structure from the perspective of rationalization and advanced agricultural industrial structure, which provides the basis for the formulation of differentiated policies. Secondly, it reveals the mechanism of digital economic empowerment for upgrading agricultural industrial structure, in-depth investigation of the transmission mechanism of agricultural technological innovation and labor transfer in the process of digital economic empowerment, and explores the differences in the mechanism of digital economic empowerment when the levels of agricultural technological innovation and labor transfer are different, which provides a new way of thinking for the promotion of upgrading of agricultural industrial structure in the context of the digital economy.