In the era of the digital economy, government digital governance has become a key driver of national governance modernization and high-quality urban development. Using panel data from 267 Chinese cities between 2018 and 2022, this study systematically examines its impact on urban entrepreneurial vitality and the underlying mechanisms. The findings reveal that: (1) A significant U-shaped relationship exists between government digital governance and urban entrepreneurial vitality. In the initial stages, government digital governance produces a temporary inhibitory effect, but in the later stages, it promotes a sustained increase in urban entrepreneurial vitality. (2) Government digital governance exhibits multidimensional heterogeneity in its impact on urban entrepreneurial vitality, with the U-shaped effect varying in strength or weakening across different industry characteristics, market potential, fiscal self-sufficiency levels, and urban industrial foundations. (3) Government digital governance influences entrepreneurial vitality through three major pathways—improving administrative service efficiency, optimizing factor market allocation, and enhancing the institutional credit environment. Accordingly, this paper proposes measures such as constructing an adaptive governance framework, categorically enhancing the enabling effects of government digital governance, and integrating the government digital governance system, aiming to fully leverage the long-term supportive role of government digital governance in urban entrepreneurial vitality.