<p>The effective and equitable governance of the environment is a critical subject that requires extensive research. It is essential to build an ecological environment conducive to improving people’s livelihoods. Emerging as a crucial driver of economic evolution, the digital economy significantly contributes to urban eco-efficiency improvements. In this study, fsQCA methods are applied to a sample of 275 cities in China, focusing on the interplay of six factors associated with the digital economy and environmental policies. The study investigates various factors and the complex causal mechanisms that influence production eco-efficiency simultaneously. (1) It is found that the driving mechanism to achieve high eco-efficiency can be divided into two paths: one is digital innovation-driven, and the other is digital-policy collaboration. (2) The elements in these groupings show characteristics of both substitutability and complementarity. Digital infrastructure and talent support effectively promote high eco-efficiency, which can be further enhanced by a digital innovation environment, industrial scale, and fiscal-type policy tools. (3) Fiscal-type policy tools serve as pivotal instruments in fostering the enhancement of eco-efficiency. To lower carbon emissions, local governments are encouraged to enhance policy support and funding while fostering innovative business models within the digital economy. (4) The study also reveals that ecological-type policy tools may produce opposite effects when combined with different conditions, indicating asymmetry in their application.</p>