Deepening the division of labor among Small and Medium-sized Enterprises (SMEs) is a key way to enhance their core competitiveness and an important path to improve the safety and resilience of industrial chains. Against the backdrop of the digital economy, digital transformation not only helps large enterprises achieve standardized restructuring but also profoundly impacts the division of labor methods of SMEs. Among them, specialized, refined, differential and Innovational ("SRDI") enterprises can play an exemplary and leading role in the specialized development of other SMEs. Based on data from A-share listed "SRDI" enterprises from 2000 to 2023, the diverse impact mechanisms of digital transformation on the vertical specialization of SMEs were empirically examined from the perspectives of cost, innovation, and financing. The results reveal that digital transformation significantly improves the vertical specialization of SMEs. This conclusion is still valid after a series of robustness tests. The mechanism analysis finds that digital transformation deepens vertical specialization by reducing external transaction costs, enhancing innovation capabilities, and alleviating financing constraints. The heterogeneity analysis indicates that this promoting effect is more pronounced in non-labor-intensive enterprises, state-owned enterprises, and enterprises located in regions with higher marketization levels and in eastern China. The influence mechanism of digital transformation on the division of labor of SMEs is revealed. It conclusions are considered to provide practical pathways for SMEs to deepen their division of labor. Implications are offered for the formulation of policies related to the digital transformation and high-quality development of SMEs.