<p>Smart city strategies are the key policy in China’s modernization. Yet how such strategies influence urban innovation remains insufficiently understood. This study employs a multi-period difference-in-differences approach within the Technology-Organization-Environment (TOE) framework to analyze panel data from 283 prefecture-level cities in China from 2006 to 2021. It seeks to evaluate the impact of smart city pilot policies on urban innovation levels and their mechanisms of action. The findings suggest that these policies are associated with higher urban innovation, with particularly pronounced effects in central and western regions and in small and medium-sized cities. The mediation effect model shows that improvements in information and communication technology, transportation infrastructure, digital government and social capital are potential channels linking smart city development to higher innovation, and that these mechanisms differ across regions. Spatial analysis further indicates the spillover effects of smart city policies, whereby innovation activities in pilot cities positively affect neighboring cities through regional networks. Overall, the research provides causal evidence and an analytical framework for evaluating place-based innovation policies and their effects on regional development disparities.</p>