Abstract:The excessive income gap in the industries directly affects the realization of the common prosperity strategy and high-quality economic development. Based on the data of China Household Tracking Survey CFPS 2018, this paper discusses the impact and mechanism of digital economy on industry income gap. The research found that: the digital economy has a significant “U-shaped” impact on industry income inequality. From the perspective of heterogeneity, the “U-shaped” impact is more significant among male labor groups, individual and private enterprises, as well as labor-intensive industries, but not significant in female labor groups, state-owned and public institutions. In the secondary industry, the impact is negative, whereas in the tertiary industry and capital-intensive industries, the impact is inversely “U-shaped”. Further mediating effect test results show that the level of household entrepreneurship plays an obvious mediating role in the “U-shaped” relationship between the digital economy and the industry income gap.