["Bulletin of Economic Research, EarlyView. ", "\nABSTRACT\nThis article constructs the entropy method to construct a more comprehensive digital economy indicator system, combines the two‐way panel threshold model, intermediary effect model, and threshold effect model to explore the mechanism of digital economy enabling manufacturing industry carbon reduction in 192 prefecture‐level cities in China. First, digital economy has effectively enabled manufacturing industry’ carbon emission reduction by enhancing energy efficiency and promoting industrial structure upgrading. Second, the enabling effect will vary according to regional heterogeneity and different industrial development scales. Third, there is a single threshold of institutional environment and industrial scale for digital economy to promote carbon emission reduction.\n"]