Enhancing total factor energy efficiency is a critical issue that needs to be addressed in the context of accelerating transformation in digital technologies and advancing sustainable development. This paper selects panel data from 282 prefecture-level cities in China from 2011 to 2021 to empirically analyze the impacts, mechanisms, and characteristics of digital technology innovation on urban total factor energy efficiency. The research findings indicate that digital technology innovation significantly enhances urban total factor energy efficiency. Specifically, a 1% increase in digital technology innovation leads to an approximate 0.035% improvement in energy efficiency. The mechanism tests reveal that financial support, represented by digital finance and green finance, plays a progressively increasing mediating role in enhancing urban total factor energy efficiency through digital technology innovation. When financial support surpasses a certain threshold, the effect of the mediating mechanism increases by over 20%. Discussions on the heterogeneity of the effects demonstrate that in cities with stronger regional innovation capabilities, higher proportions of traditional energy consumption, and more pronounced biases in innovation policies, energy policies, and financial support policies, the impact of digital technology innovation on total factor energy efficiency is more pronounced, generally 1 to 2 times higher. Particularly in cities with stronger innovation capabilities, the impact effect is about 7 times greater.