Abstract: The unblocking of the domestic and international dual circulation is a practical innovation to promote China's modernization. Digital inclusive finance, as a new driving force for China's economic growth, plays a crucial role in facilitating the development of the unblocked dual circulation. This study aims to explore the mechanisms and effects of digital inclusive finance in contributing to the development of the unblocked dual circulation. Empirical analysis using panel data from 30 Chinese provinces between 2011 and 2020 reveals that digital inclusive finance effectively promotes domestic and international dual-loop development by stimulating entrepreneurial activity. Furthermore, the impact of digital inclusive finance on the dual circulation is found to be exponentially amplified over time. In terms of spatial variation, the driving effect of digital inclusive finance is more pronounced in the central and western regions, while it is not significant in the eastern regions. Based on these findings, four corresponding proposals are put forward: enhancing the national financial system, promoting innovation in digital inclusive finance, strengthening the integration of the digital and real economies, and enhancing financial regulation.