Abstract: The digital economy has created new opportunities for income growth in the tea industry. Using first-hand survey data from the National Tea Industry Technology System, this study constructs a digital literacy index for tea farmers in China’s major tea-producing regions, examines its impact on their sales income and its underlying mechanisms, and further analyzes its contribution to shared prosperity. The results show that: 1) digital literacy displays clear spatial differentiation, with higher levels in the east and lower levels in the west. Tea farmers have formed capabilities in knowledge acquisition, social interaction, and commercial application, while device operation and digital security skills still need improvement; 2) digital literacy significantly increases sales income, and a one-unit increase in the index raises sales revenue by about 0.8 percent, consistent with robustness checks; 3) digital literacy promotes income growth by reducing transaction costs, strengthening social networks, and advancing industrial integration; 4) digital literacy narrows intra-farmer income gaps, mitigates income inequality, and helps low-income farmers move into the middle-income group, although an elite bias remains. Accordingly, this study recommends developing tiered digital literacy enhancement mechanisms, leveraging social-network advantages in tea trading, implementing tea–culture–tourism and digital empowerment policies, and promoting inclusive and structured improvement of digital capabilities. The study enriches the understanding of farmers’ digital literacy and offers policy insights for enhancing tea farmers’ digital capacity, increasing income, and advancing shared prosperity.