Abstract: This paper uses Entropy Weight Method and Principal Component Analysis Method to measure the quality of public services and the development level of digital economy in 28 provinces in China, and empirically analyzes the effect and mechanism of digital economy on public services quality. Results show that the improvement of digital economy can significantly promote public services quality, but the promotion effect decreases with digital economy developing. Thus, the promotion effect is regional heterogeneous and stronger in central and western regions. Digital economy can improve the quality of public services both by improving fiscal transparency and reducing financial pressure on local governments. In the end, it puts forward policy suggestions including accelerating the development of digital economy, improving digitalization level of public services, enhancing fiscal transparency, strengthening the supervision of fiscal expenditures, alleviating local fiscal pressures, and improving the diversified supply mechanism of public services.