Background <p>Understanding digital healthcare services in age-friendly community (AFC) initiatives and their implementation is crucial for developing evidence-based policies and practices. In this study, we aim to explore the question, “What is it about digital healthcare services that work, for whom, and under what circumstances?” in top-down AFC initiatives using Shanghai, China, as a representative case.</p> Methods <p>We employed a novel realist evaluation methodology and gathered insights from critical informants and users, including policymakers, community officers responsible for implementing AFC initiatives, and older adults.</p> Results <p>The findings revealed six context-mechanism-outcome configurations. The government-led top-down AFC initiative, along with its related policies, serves as a critical context for supporting the provision of digital healthcare services and improving outcomes for older adults and their communities. A bottom-up approach values individual demand-oriented methods, providing digital healthcare services in AFC initiatives by considering older adults’ health and social situation as a critical context, utilizing digital care services and support as resources, and enhancing user experience. A feasible path forward is to support healthcare professional-led collaboration in developing and implementing digital healthcare services, aligning bottom-up and top-down practices, and focusing on individual demand, social equity, privacy concerns, and data-driven feedback.</p> Conclusions <p>Top-up support, active engagement of providers, and closer local monitoring of digital healthcare service implementation in AFC initiatives may encourage long-term effectiveness and sustainability.</p>