<p>Green transformation has become a central goal of China’s development strategy in response to mounting environmental pressure and long-term growth needs. Improving green innovation efficiency (GIE) is essential to achieving this transformation while sustaining economic momentum. This study evaluates the impact of the Pilot Policy for Innovative Industrial Clusters on GIE across Chinese cities. Using panel data from 280 prefecture-level cities between 2007 and 2021, we apply difference-in-differences and spatial difference-in-differences (SDID) models to estimate policy effects, spatial spillovers, and transmission mechanisms. The results are as follows: (1) The pilot policy significantly improves GIE in the pilot cities, with robust results after various tests. (2) The policy enhances urban green innovation through four main channels: reducing energy consumption intensity, upgrading industrial structure, fostering green technological innovation, and accelerating digital infrastructure development. (3) In addition to its direct impact on pilot cities, the policy also boosts the GIE of neighboring cities via spatial spillover effects. (4) Heterogeneity analysis reveals that the policy’s effect is more pronounced in central cities, non-resource cities, and cities with a strong environmental protection focus. This study contributes to the understanding of innovative industrial cluster policies in enhancing GIE and offers valuable policy insights for promoting urban green development.</p>