Abstract: Based on the data of the China Family Panel Studies from 2014 to 2018, this paper examines the impact and mechanism of digital inclusive finance on the relative poverty of urban and rural residents from the perspective of income inequality. The study found that for every 1% increase in the digital inclusive finance index, the probability of relative poverty of residents decreases by 3.2%. Digital inclusive finance effectively alleviates the relative deprivation of individuals. The reason is that the development of digital inclusive finance improves household risk management capabilities, It eases financing constraints and promotes the expansion of family social capital. However, the study also found that there are also heterogeneous differences in the mitigation effect of digital inclusive finance on relative poverty. Due to the trickle-down effect, digital inclusive finance can help alleviate the relative poverty of low- and middle-income groups, but due to the existence of the "digital divide" effect, the mitigation effect of the relative poverty of urban households is greater than that of rural families, and the mitigation effect of the young and middle-aged groups is greater than that of the elderly. Therefore, enabling digital empowerment to alleviate poverty is an effective way to control relative poverty.