External audit can soften financial constraints, alleviate the principal-agent problem and then positively affect the technological innovation of enterprises. Based on the survey data of the World Bank, the paper explores the internal mechanism of the external audit to the enterprises technological innovation. The empirical results show that :(1)The external audit has significantly facilitated enterprises technological innovation. Under the given conditions, the probability that an enterprise with external audit is engaged in technological innovation is 13. 2% higher than that of any other enterprises(2)The mediation effect of financial constraint and agency cost is significant at the statistical level, and both are partial mediating effects.(3)In heterogeneous technological innovation activities, external audit has a significant promoting effect on different types of innovation. From the perspective of intermediary mechanism, external audit promotes enterprises to develop new technology and equipment for product or process improvements, introduce new quality control procedures and add new features to existing products or services by softening financial constraints; while external audit promotes enterprises to improve production flexibility by reducing agency cost. The research results extend the analysis of the influence of external audit on enterprise behavior and provide practical foundation for strengthening external audit supervision mechanism to promote enterprises technological innovation.