Urban digitalization is a critical focus for economic development and the low carbon transition. Recognizing how urban digitalization influences carbon emissions efficiency (CEE) is of great practical significance to high-quality urban development. Previous studies have lacked a systematic exploration of the internal mechanisms and dynamic effects of urban digitalization on CEE. Based on data from 2011 to 2019 at the municipal level in China, this paper adopts efficiency analysis and entropy value method to measure urban digitalization development and CEE and analyze their spatial–temporal evolution characteristics. Moreover, this paper empirically tests the overall, time, and spatial effects of urban digitalization on CEE, as well as the effect pathways. According to the findings, urban digitalization has a significant stimulative influence on CEE. The promotion effect shows a trend of increasing over time. Urban digitalization has a positive spatial spillover effect on the CEE of surrounding cities, which is conducive to accelerating the integration process of low-carbon development among cities. Urban digitalization improves CEE by raising the level of human and information communications technology capital and optimizing the industrial structures. The above conclusions still hold after robustness and endogenous tests. In addition, compared to cities in the eastern part of China and those with low levels of digitalization, those in the central and western parts of the country, and those with high levels of digitalization show a more significant boost to CEE as a result of urban digitalization. These discoveries have policy design reference value for the region to enhance its urban digitalization development strategy and achieve a transition to green development.