This paper mainly explores the spatial effect of digital economy development on the upgrading of Chinese residents’ consumption structure through Empirical Analysis based on Spatial Dubin Model and mediating effects model with panel data of 31 provinces from 2011 to 2020. The study finds that the effect of digital economy development on the upgrading of local residents’ consumption structure shows an inverted U-shape， while there is a positive spatial spillover effect on the upgrading of consumption structure of residents in neighbouring regions with a clear boundary defining the degree of the effect， within 300 kilometers from which the spatial spillover is positive， while beyond which the spatial spillover coefficient decreases. The spatial spillover effect is hindered by provincial boundaries. Further analysis of the spatial heterogeneity model reveals that the development of the digital economy has a more significant effect on the upgrading of the consumption structure of residents in rural and western regions. In terms of the mechanism of action，the development of digital economy achieves the upgrading of consumption structure by reducing transaction costs， raising income levels and enhancing residents’ sense of well-being. Based on this， it is proposed that the government should adopt regional synergistic development，eliminate institutional barriers to the flow of digital factors， bring into play the radiation of digital technology and enhance residents’sense of well-being， etc.