Abstract: The new qualitative transformation of the service industry is a high-quality service economy form with endogenous knowledge production as the core, achieved through the optimization of the service industry structure and the dynamic balance mechanism between supply and demand, and the reshaping of efficiency models. Based on the logical thinking of "elements product industry", this paper elaborates on the theoretical mechanism of digital technology innovation promoting the new quality development of the service industry. Next, an evaluation index system for the new quality development of the service industry is constructed, which includes five dimensions: technological innovation, knowledge accumulation, quality upgrading, business transformation, and economic contribution. It is pointed out that the new quality development of China's service industry presents characteristics of overall low-level slow rise, significant stage heterogeneity, uneven development of various core dimensions, and regional development polarization. Finally, empirical tests were conducted using panel data from 30 provinces in China from 2011 to 2023, and it was found that digital technology innovation can significantly promote the overall and multi-dimensional development of the service industry's new quality. This conclusion still holds true after a series of robustness tests. Mechanism testing shows that upgrading supply side factors, driving demand side momentum, and ensuring institutional environment constitute a triple empowerment path, which can more fully unleash the empowering potential of digital technology innovation for the new quality development of the service industry.