Abstract: Household consumption provides an important support of the promotion of the domestic economic cycle and the development of the high-quality economy. In the digital age, it is of great significance to explore the impact of digital economy on household consumption. This paper first analyzes the internal mechanism of the digital economy affecting residents’ consumption, and then conducts an empirical study based on a dataset of 248 prefecture-level cities from 2011 to 2019. Our results show that: (1) The digital economy has improved the level of household consumption, of which industrial upgrading is an important channel. (2) The boosting effect of the digital economy on the consumption of urban households is greater than that in rural areas; the impact of the digital economy on household consumption has obvious regional and group disparities that the consumption of households in the eastern and central regions and middle-income groups has increased more significantly. (3) The development of digital economy has obvious spatial spillover effect on residents' consumption. Therefore, to better utilize the effect of the digital economy on household consumption, we suggest that policymakers should vigorously develop the digital economy and consolidate the consumption foundation, promote the digital transformation and upgrade industries to stimulate consumption potential, deepen the coordinated development of the digital economy and make up for the shortcomings of household consumption.