Abstract: With the rapid development of digital technologies in agriculture, exploring digital empowerment pathways is essential for facilitating the modernization of smallholder farmers. Based on micro-level data of smallholder farmers from the China Rural Revitalization Survey (CRRS) database, this study constructs an evaluation index system for digital technology adoption and smallholder integration into modern agriculture. Using the Probit model, it empirically examines the impact, underlying mechanisms, heterogeneity, and spatial spillover effects of digital technology adoption. The findings are as follows: 1) Digital technology adoption significantly increases the probability of smallholder farmers integrating into modern agriculture, and this result remains robust after performing robustness tests and addressing endogeneity issues; 2) Mechanism analysis indicates that digital technology adoption enhances smallholders’ digital literacy and skills, effectively promoting their integration into the modern agricultural system; 3) Heterogeneity analysis shows that the empowering effects of digital technology adoption vary across different types of smallholders, with stronger impacts on those with lower education levels, full-time farmers, and farmers in geographically convenient areas; 4) Spatial spillover analysis demonstrates that digital technology adoption not only facilitates the modernization of local smallholders but also drives neighboring smallholders to integrate into the modern agricultural system. Based on these results, policy recommendations are proposed, including strengthening inclusive rural digital infrastructure, enhancing farmers’ digital literacy, implementing differentiated and targeted empowerment strategies, and establishing cross-regional diffusion mechanisms for digital agriculture, all aimed at promoting smallholder integration into modern agriculture.