Abstract: With the elimination of absolute poverty in China under the prevailing criteria, alleviating multidimensional relative poverty becomes the focus of poverty alleviation in the new era. Thus, it is of important practical significance to alleviate the multidimensional relative poverty of rural households by exploiting the advantage of digital finance. Based on the data of the China Household Finance Survey (CHFS), this paper analyzed the impacts of digital finance on the multidimensional relative poverty of rural households and discussed its impacting mechanism and regional heterogeneity by the A-F method, the Probit model, and the mediating effect model. Results show that 39.7% of rural households used digital finance, indicating that the number of rural households using digital finance was still relatively low. Multidimensional relative poverty of rural households mainly occurred in relatively poor groups of vulnerable and general types, development capacity has become a key dimension to alleviate relative poverty and the western region of China remains the one where relative poverty was concentrated. Digital finance can effectively alleviate the multidimensional relative poverty of rural households and impose a positive impact on alleviating the multidimensional relative poverty of the vulnerable type. Digital finance also has a greater impact on alleviating the poverty of development capacity and of economic viability. Furthermore, it can alleviate the multidimensional relative poverty of rural households by improving their financial literacy. Heterogeneity analysis found that digital finance can better reduce the probability of multidimensional relative poverty among rural households in the eastern region of China. Therefore, this paper provides some policy suggestions, including continuing to promote digital construction in rural, central, and western regions of China, strengthening the publicity and targeted guidance on digital finance-related knowledge and skills, and promoting the development of digital credit in rural areas.