This paper aims to examine the impact of the digital economy on urban entrepreneurship and its spatial spillover effects. To achieve this purpose, this research relies on data from 252 prefecture-level cities in China from 2012 to 2019. The findings demonstrate that the development of the digital economy has a positive influence on entrepreneurial activity in cities, with particularly effects observed robust at higher quantile levels. Additionally, the results suggest that urban entrepreneurial activity may be a siphoning effect, impeding entrepreneurship in neighboring cities. Furthermore, further investigation shows regional and policy heterogeneity.