In the context of the digital age, studying the specific impact mechanism of digital transformation on enterprises has become one of the research hotspots. This article takes multi-source data of A-share listed companies on the Shanghai and Shenzhen stock markets from 2012 to 2022 as the research sample, scientifically quantifying digital transformation, and using a fixed effects panel model to empirically study the impact mechanism of digital transformation on enterprise innovation and further on enterprise development. Research has shown that digital transformation has a significant positive impact on enterprise innovation. Digital transformation can enhance the research and development intensity of enterprises, thereby affecting enterprise innovation, and transparency can positively regulate the impact of digital transformation on enterprise innovation; Digital transformation will have a promoting effect on enterprise innovation, which in turn will promote the development of enterprises. Based on the results of mechanism research, corresponding suggestions have been proposed for enterprise decision-making for reference.