The increase in domestic demand, as the main driving force of the internal circulation of the economy, can provide important support for the good operation of the national economic cycle. The development of digitalization and intelligence has enabled the economic cycle to break through the limitations of localization and materialization, and inject new characteristics into the economic cycle. This paper uses web crawler technology to obtain intercity digital information flow data, describes intercity digital information flow through three variables including digital information transmission volume, information aggregation capabilities and information radiation capabilities, and combines the data of micro individuals, enterprises and cities to investigate the impact and transmission mechanism of intercity digital information flow on the internal circulation power of the economy. The conclusions of this paper are as follows. First, enhancing the intercity digital information flow can enhance the economic internal circulation power of the city, in which the promotion effect of urban digital information transmission on the economic internal circulation power has the characteristics of marginal increase, while the promotion effect of urban information aggregation capabilities and information radiation capabilities has the characteristics of marginal decline. Second, cities with denser intercity digital information flows, stronger urban economic internal circulation power and higher per capita income play a stronger role in promoting the internal circulation of urban economy through intercity digital information flow, and the development of intercity digital information flow may exacerbate the phenomenon of digital divide. Third, the intercity digital information flow increases residents’consumption through the population movement effect, increases enterprise investment through the effect of new ventures, and extends the industrial chain and supply chain through the effect of technological progress, so as to enhance the city’s economic internal circulation power.