<p>On the basis of establishing a theoretical analysis framework in three aspects: direct impact of digital infrastructure construction (DIC) on economic development (ED), indirect pathway of DIC on ED through living environment governance (LEG), role of DIC on ED with modern industrial system construction (MISC) variation, this paper utilizes the panel data of 31 provinces (municipalities and autonomous regions) in China from year 2013 to 2022, constructs explanatory variables, explained variables, mediating variable and threshold variable based on entropy method, selects control variables and establishes two-way fixed effect models to empirically test the impact of China’s DIC on ED and verify the mediating effect of LEG through mediating model and threshold effect of MISC through threshold model. It is found that DIC plays a significantly positive effect on ED directly, and the results remain robust after robustness tests and endogeneity tests are conducted. The direct impact of DIC on ED demonstrates significant economic development-level and marketization-level heterogeneity. In highly developed region and high marketization area, DIC has the most significant impact on ED. Mechanism effect test illustrates that the length of fiber optic cable has the strongest positive impact on ED. DIC could also influence ED indirectly through LEG, which means LEG has mediating effect between DIC and ED. Panel threshold test reveals that MISC is significant for double threshold and the impact of DIC on ED is influenced with variation of MISC. This paper provides a reference for how to promote economic development through living environment governance and with the variation of modern industrial system construction, and also for solving the problem of unbalanced development to a certain extent.</p>