Abstract: Against the backdrop of continued outmigration of agricultural labor and rising production costs, agricultural drones have become an important technology for transforming grain production. However, micro-level empirical evidence on their income-increasing effects and underlying pathways remains limited. Using three-wave balanced panel data for 412 rice-growing households in Hubei Province from 2020 to 2022, this study employs a two-way fixed effects model and instrumental variable two-stage least squares (Ⅳ-2SLS) estimation to examine the effects of drone technology adoption on farmers’ net income from rice cultivation, the underlying pathways, and heterogeneity across farmer groups. The results show that: 1) after mitigating potential endogeneity, drone technology adoption has a significant positive effect on net income from rice cultivation, increasing net income per unit area by approximately CNY 3,700/hm²; 2) drone technology adoption increases rice yield by approximately 255.95 kg/hm² and reduces the total per-unit-area cost of fertilizers, insecticides, and herbicides by approximately CNY 500/hm², indicating that higher yields and lower material costs are two important pathways through which drone technology adoption increases farmers’ income; and 3) the income-increasing effect of drone technology adoption is heterogeneous across farmers and is more pronounced among those with more years of education, lower frequencies of medical visits, and non-elderly farmers. Based on these findings, the agricultural drone socialized service system should be further improved, operation standards and quality supervision mechanisms should be strengthened with a focus on increasing yields and reducing costs, and greater emphasis should be placed on technical training and service coordination for farmers with lower levels of education, higher frequencies of medical visits, and elderly farmers, so as to improve the suitability and inclusiveness of drone technology extension.