With the advent of the digital economy era, the development of business process digitalization provides new chances for firms to innovate. This paper aims to investigate how business process digitalization affects innovation performance and the underlying mechanism for China’s manufacturing firms. Based on the World Bank’s survey data of 1,212 Chinese manufacturing firms in 2012, we usehierarchical regression, Sobel test, and Bootstrap test to empirically test our theoretical hypotheses. We find that process digitalization has a positive impact on firms’ ambidextrous learning and innovation performance. Ambidextrous learning partially mediates the relationship between process digitalization and innovation performance. The relative balance of ambidextrous learning enhances the effects of business process digitalization on innovation while a comprehensive balance of ambidextrous learning does not significantly moderate the relationship between process digitalization and innovation performance. From the theoretical perspective of ambidextrous learning, we have extended the research on the mechanism how digital transformation helps firm enhance firm innovation, which has important implications for China’s manufacturing firms to leverage digital transformation to improve innovation performance.