Abstract: In the era of digital transformation, the phenomenon of enterprises acquiring heterogeneous technologies or knowledge across industry boundaries for cross-industry innovation has significantly increased. This form of innovation has become an important way for enterprises to seek new development opportunities. However, the mechanism through which digital transformation influences cross-industry innovation performance remains unclear. Using data from A-share listed enterprises in China engaged in cross-industry innovation from 2012 to 2022, this study explores the mechanisms by which digital transformation affects enterprise cross-industry innovation performance. The research finds that: (1) Digital transformation enhances enterprise cross-industry innovation performance; (2) Knowledge flow and knowledge diversification mediate the relationship between digital transformation and enterprise cross-industry innovation performance; (3) The impact of digital transformation on cross-industry innovation performance varies in intensity depending on the type and nature of the enterprise. Specifically, the effect is stronger for state-owned enterprises, large enterprises, and mature enterprises. Based on these findings, the study proposes several recommendations to promote enterprise cross-industry innovation: enterprises should actively enhance their digital capabilities, integrate resources both within and outside their industry, and leverage differentiation advantages to overcome homogeneous competition; local governments should develop a more comprehensive digital transformation framework, build robust digital infrastructure, improve digital information platforms, cultivate digital talent, and promote the standardization of policies for digital economy development as well as the systems and mechanisms of digital economy development; facilitate the channels for digital-driven cross-industry innovation in enterprises; and enterprises of different types should develop tailored digital transformation and cross-industry innovation strategies based on their specific characteristics and advantages.