The development of digital inclusive finance in rural areas is a key to increasing the income of rural households and improving income distribution, which is vital to achieving common prosperity for farmers in rural areas. Based on a field survey data from 11 counties in six provinces in the Yellow River basin, this paper analyzed the impacts of digital inclusive finance on income generation, poverty alleviation and income distribution of rural households by the OLS model, the Probit model and the quantile regression method. In addition, this paper also explored the impact mechanism of digital inclusive finance on income growth by the mediating effect model, followed by endogenous and robustness tests. Results show that the development level of digital inclusive finance in the middle and upper reaches of the Yellow River basin is below the medium level of all counties in China, with obvious regional differences. 43.9% of rural households are in relative poverty, and household income needs to be further improved. The development of digital inclusive finance can increase rural households’ income, reduce the possibility of relative poverty, and lower the incidence of relative poverty in villages. Digital inclusive finance has more effects on the low-income groups and can improve rural households’ income distribution. The three indicators of digital inclusive finance have different impacts on poverty alleviation and income distribution. The effect of digital inclusive finance on increasing farmers’ income in the middle reaches of the Yellow River basin is even more obvious. In addition, county industrial structure upgrading plays a partial intermediary role in the revenue-raising effect of digital inclusion. Therefore, this paper suggests to continuously promote the development of digital inclusive finance in the middle and upper reaches of the Yellow River basin and accelerate the transformation and upgrading of county industries. In addition, it is necessary to strengthen the efforts to carry out digital financial education so that digital dividends can benefit disadvantaged groups more fairly and promote the realization of common prosperity for all people.