In the new stage where digital technology is deeply integrated with agricultural production，digital literacy plays a crucial role in facilitating the organic combination of smallholder farmers and modern agricultural technologies such as agricultural machinery. Based on the microdata from the China Family Panel Studies （CFPS2020），this paper empirically examines the impact of digital literacy on farm households’investment in agricultural machinery and explores its mechanisms from three dimensions：information bridging，financing alleviation，and income growth.The research findings indicate that digital literacy significantly promotes farm households’investment in agricultural machinery，and this effect remains valid after robustness and endogeneity tests.Mechanism analysis shows that digital literacy enhances investment in agricultural machinery by breaking information constraints，alleviating formal credit constraints for farmers，and increasing per capita household income.Heterogeneity analysis reveals that the impact of digital literacy on agricultural machinery investment varies significantly across different regions and farm operation scales.Therefore，this study suggests that in the new stage of digital empowerment for sustainable agricultural development，improving farmers’digital literacy and deepening the application of digital technology in agricultural production can effectively stimulate farm households’investment in agricultural machinery，thereby providing important support for accelerating the modernization of agricultural production.