<p>Enhancing green innovation is critical for governments addressing global environmental crises and accelerating energy transitions. Against this background, this paper selects 263 cities in China from 2010 to 2021 as the research sample and focuses on evaluating the policy effect of “new energy demonstration city” on urban green innovation. The empirical analysis using the difference-in-difference method shows that the policy significantly promotes urban green technological innovation. A series of robustness tests strengthened the reliability of this finding. The mediation analysis reveals that the “new energy demonstration city” policy can promote urban green innovation by increasing green total factor productivity, reducing land mismatch and alleviating resource dependence. In addition, heterogeneity analysis reveals that innovative cities, southern cities and cities with higher levels of industrialization respond more positively to this policy and can significantly promote green innovation.</p>