Improving energy efficiency is essential for China’s goals of high-quality economic growth and carbon neutrality. Digital finance, combining financial services with digital technologies, has offered potential to enhance energy efficiency. This study examines the impact of digital finance on total factor energy efficiency in China using panel data of 30 provinces from 2000 to 2022. TFEE is measured using a stochastic frontier analysis model incorporating CO2 emissions as an environmental input within a Shephard energy distance function framework, thus reflecting both economic output and environmental costs. Then the effect of digital finance on TFEE is measured using fixed effect models. The empirical results indicate that digital finance significantly improves TFEE, particularly through its usage depth and digitalization degree, while coverage breadth shows no evident effect. Mediation analysis further reveals that digital finance promotes TFEE through industrial structure upgrading, though green technology innovation does not show a statistically significant mediating effect.