<p>The green transformation (GT) of China’s small and medium-sized manufacturing enterprises (manufacturing SMEs) is urgent. With the application of technologies in the financial field, this paper aims to explore the relationship between digital inclusive finance (DIF) and the GT of manufacturing SMEs. Using panel data from manufacturing SMEs listed on China’s SME Board and ChiNext Board between 2012 and 2022, this study designs an empirical model and delves into the effect of DIF development on GT of manufacturing SMEs. This study reveals that the development of DIF can promote GT of manufacturing SMEs. Mechanism tests indicate that this promotional effect is primarily achieved through alleviating financing constraints, reducing agency costs, and promoting green innovation. Furthermore, the analysis of moderating factors reveals that environmental regulation notably potentiates the positive impact of DIF on GT. A heterogeneity analysis further shows that the effect is particularly pronounced for technology-intensive and heavily polluted SMEs, those heavily reliant on labor and capital, and firms located in the central and western regions of China. This study enriches the existing literature by shifting the research focus from the macro level of regional manufacturing GT to the micro level of manufacturing SMEs, and by constructing a multidimensional GT index covering industrial structure, environmental pollution, resource utilization, green production, and environmental information disclosure. It also extends the understanding of DIF’s economic consequences by identifying three parallel mediating pathways and by revealing the moderating role of environmental regulation. This study provides new empirical evidence on DIF and GT, and proposes targeted policy recommendations, which are conducive to supporting GT of manufacturing SMEs and promoting the sustainable development of DIF.</p>