State-owned enterprises are the “main force” in the strategic development of national science and technology. Stimulating the technological innovation vitality of state-owned enterprises is an essential component of constructing a new development paradigm. In the context of the development of the digital economy, this paper, based on panel data from A-share state-owned listed companies for the years 2011-2022, explores the impact and mechanism of digital transformation on technological innovation in state-owned enterprises. The research finds that digital transformation contributes to driving the “quality and quantity” improvement of technological innovation in state-owned enterprises. Furthermore, the digital transformation of state-owned enterprises can enhance management efficiency, increase supply chain concentration, and attract government subsidies, providing multi-dimensional empowerment for technological innovation. Additionally, the “quantity” effect of technological innovation from digital transformation in state-owned enterprises continues to strengthen with the increase in external environmental uncertainty, while the “quality” effect deepens with the enhancement of the embeddedness of the internal directorial network. Finally, this study proposes practical measures such as accelerating the pace of digital transformation, constructing multi-level transformation paths, and enhancing environmental adaptability to provide theoretical basis and practical references for empowering technological innovation in state-owned enterprises through digital transformation.