This study analyzes provincial panel data from China covering the period from 2014 to 2022 to measure the level of industrial digitalization across three sectors: agriculture, industry, and services. Additionally, it accounts for the input of data factors and various undesired outputs while evaluating green total factor productivity, thereby exploring the interaction effects and mechanisms between the two. The research findings are demonstrated as follows: Significant disparities exist in the levels of industrial digitalization among provinces, demonstrating a spatial pattern of “East >Central >West.”Moreover, green total factor productivity shows a consistent upward trend, indicating a progressive improvement in regional multi-level differentiation. Robustness tests reveal that industrial digitalization across Chinese provinces significantly enhances green total factor productivity, with impact effects characterized by the order of agriculture < industry < services. Regarding transmission pathways, the development of industrial digitalization in each province predominantly boosts green total factor productivity by reducing the mismatch between capital and labor and facilitating industrial structure upgrades; In provinces characterized by high public environmental awareness and lower industrialization levels, the effect of industrial digitalization on enhancing green total factor productivity is comparatively pronounced; The impact of industrial digitalization on green total factor productivity exhibits a single threshold characteristic, contingent upon the intensity of various forms of environmental regulation, with threshold values of 0.4582 for command-and-control regulation and 0.0096 for market-based regulation. Consequently, the government should formulate differentiated regional industrial policies and marketing strategies to more effectively promote the development of industrial digitalization and bolster green total factor productivity, thereby achieving sustainable green development.