Common prosperity is the essential requirement of Chinese modernization. As a new form of financial development, whether the development of digital inclusive finance, which integrates digital and inclusive, can provide a starting point for the realization of common prosperity, deserves great attention. For this purpose, the paper first constructs a two-sector model including institutional factors for analysis, and puts forward relevant research hypotheses. Then, using the panel data from 2013 to 2019, based on the core connotation of development and sharing, the index system is constructed to measure the common prosperity level of prefecture-level cities, and the common prosperity effect of digital inclusive finance is tested. The benchmark test found that digital financial inclusion can promote common prosperity, and this effect is more obvious in urban agglomeration areas, and the result is still robust after easing endogeneity, transforming samples, adjusting variables and replacing empirical models for regression. The mechanism analysis shows that the common prosperity effect of digital inclusive finance is enhanced mainly by reducing transaction costs from geographical distance and cultural distance within urban agglomerations. Heterogeneity analysis shows that the common prosperity effect of digital inclusive finance is more obvious in mature urban agglomerations, multi-center urban agglomerations and eastern urban agglomerations. The fractal regression reveals that urban agglomeration policies mainly activate the effects of the depth of digital inclusive finance use and the degree of digitalization on common prosperity. Finally, from the aspects of promoting the development of digital inclusive finance, accelerating the construction of urban agglomeration, formulating policies according to the development characteristics of urban agglomeration, and activating the data factor market of the financial industry, the paper proposes an effective path to enhance the common prosperity effect of digital inclusive finance.