The third plenary session of the 20th Central Committee of the Communist Party of China points out that the integrated development of urban and rural areas is an inevitable requirement of Chinese path to modernization. Promoting the integrated development of urban and rural areas is an important element of promoting all-around rural revitalization, and it is also an important path to building a unified national market. The integrated development of urban and rural areas requires breaking down a series of institutional barriers and promoting the orderly flow of urban and rural factors. The rapid rise and prosperity of the digital economy provide new opportunities for the integrated development of urban and rural areas. Exploring the impact of digital economy on the integrated development of urban and rural areas has important theoretical and practical significance. This article focuses on the upgrading of industrial structure, marketization process, and equalization of basic public services. Through mathematical analysis, it clarifies their inherent mechanisms, enriches existing research, and provides empirical evidence. Firstly, based on China's inter-provincial panel data from 2011 to 2020, the article constructs an evaluation system of relevant indicators, measures the development level of provincial digital economy and urban-rural integrated using the entropy method, and explores its spatiotemporal evolution characteristics using Kernel density estimation method. The results show that in general, the level of digital economy and urban-rural integrated development is showing a continuous upward trend, but there is a regional imbalance in the degree and speed of development. The level of digital economy is showing a multipolar trend among regions, while the gradient effect of urban-rural integrated development between regions continues to strengthen. Secondly, the article uses empirical methods to examine the impact of digital economy on the integrated development of urban and rural areas, and explores the path of the impact. Results show that, firstly, digital economy can significantly promote the integrated development of urban and rural areas, but the degree of impact varies regionally. The impact of digital economy on the integrated development of urban and rural areas in the western region is higher than that in other regions, and has no significant impact on the northeast region. Secondly, digital economy can affect the level of urban-rural integrated development by promoting industrial structure upgrading, advancing marketization processes, and promoting equalization of basic public services. Finally, the article analyzes the spatial effects of digital economy on urban-rural integrated development. Using the global Moran's I index, the spatial correlation test results based on the economic distance matrix show that there is a significant spatial correlation between digital economy and the integrated development of urban and rural areas. The spatial spillover effect test results based on adjacency matrix, inverse distance matrix, and economic distance matrix show that the improvement of digital economy level has a positive impact on local urban-rural integration, but has a negative spillover effect on neighboring areas. Research suggests that in order to effectively leverage the role of digital economy in promoting urban-rural integration, relevant policy measures should be implemented in areas such as formulating differentiated digital economy and urban-rural development policies, accelerating the construction of digital infrastructure, breaking down factor barriers to promote orderly flow of urban-rural factors, and optimizing the allocation of digital economic resources.