Based on the panel data of A-share listed manufacturing enterprises from 2007 to 2021, this paper investigates the impact of digital transformation on innovation efficiency of manufacturing enterprises from two aspects of digital transformation, namely, digital transformation of manufacturing process and digital transformation of business model. The empirical results show that digital transformation can significantly improve the innovation efficiency of manufacturing enterprises at both the enterprise level and the manufacturing process level. In the short term, the digital transformation of business model can improve the innovation efficiency of manufacturing enterprises, but in the long term, it has a negative impact on the innovation efficiency. After considering endogeneity and other issues, this result is still significant, and the conclusion is still valid after a series of robustness tests. In terms of influencing mechanism, transaction cost plays a partial mediating effect in the relationship between digital transformation and innovation efficiency at the enterprise level and manufacturing process level, and a masking effect in the relationship between digital transformation and innovation efficiency at the business model level. Based on heterogeneity, it is found that the impact of digital transformation on innovation efficiency of private manufacturing enterprises is stronger than that of state-owned manufacturing enterprises, and the impact of digital transformation on innovation efficiency of technology-intensive manufacturing enterprises is stronger than that of labor-intensive and capital-intensive manufacturing enterprises.