Abstract: Digitalization has become an important means of promoting the development of urban leisure agriculture. Clarifying the effect of digitalization on the income of urban leisure agriculture operators is of great significance for improving the quality and efficiency of urban leisure agriculture, accelerating the process of rural revitalization, urban-rural coordinated development, and common prosperity in China. However, there is currently a lack of research on digitalization and income in urban leisure agriculture, and the theoretical relationship and effect between the two are not yet well understood. Therefore, based on a theoretical explanation of the mechanism by which digitalization affects the income of urban leisure agriculture, an empirical analysis was conducted. Field survey data from eight cities (i.e., Beijing, Shanghai, Hangzhou, Shenzhen, Wuhan, Changsha, Chengdu, and Chongqing) in 2023 were used to empirically test the effect, mechanism, and adjustment effect of digital application level on the income of urban leisure agriculture operators. An ordinary least squares (OLS) model was constructed to analyze the effect of overall and different dimensions of digital application level on the income level of urban leisure agriculture operators. A structural equation model (SEM) was used to analyze the mediation mechanism between digital application level and income level of urban leisure agriculture operators, and an adjustment effect model was constructed to test the adjustment effect of the scale of operating entity on the digital income-increasing effect. The research results indicated that: 1) overall, the level of digital application level of urban leisure agriculture operators had a significant positive impact on their income level. For every 1% increase in digital application level, the average income level of urban leisure agriculture operators increased by 2.1%. Then, a series of robustness tests were conducted by replacing the dependent variable, independent variable, and quantile regression. Instrumental variable estimation was used to alleviate endogeneity issues that could arise from omitted variables and bidirectional causality. This conclusion was still valid. 2) In different dimensions, online promotion level had not significant impact on income level. However, both online trading level and digital management and service level showed significant positive impacts on income level. Compared to digital management and service level, online trading level had a more significant effect on improving income level. 3) In terms of its mechanism, digital application level mainly improved the income level of urban leisure agriculture operators through two paths: expanding consumer groups and enhancing consumption capacity. 4) In terms of its adjustment effect, the scale of operating entity showed negative adjustment effect on the income-increasing effect of digital application level, and the negative adjustment effect on the income-increasing effect of online promotion level was the greatest, followed by online trading level, and digital management and service level. We suggest to strengthen policy incentives for accelerating the formation of digital application momentum, to synthesize technological innovation and scenario expansion to create digital application value, and to promote digital application in combination with the differentiation of operators’ scale in urban leisure agriculture in order to accelerate the digital transformation of urban leisure agriculture and promote income growth in urban leisure agriculture.