Addressing the digital institutional differences across regions poses a significant theoretical and practical challenge for the internationalization of digital innovation. Drawing upon the institutional theory, this paper introduces the concept of “digital institutional distance” and systematically analyzes the mechanisms through which formal and informal digital institutional distances influence the internationalization of digital innovation. Formal digital distance affects the opportunity recognition, path selection, mode construction, and transformation efficiency of digital innovation, while informal digital institutional distance determines the social environment, legitimacy, and acceptance of digital innovation. Building on these findings, this paper proposes digital innovation internationalization strategies tailored to different distance combinations, including collaborative development strategy, customized generation strategy, adaptive innovation strategy, and integrative diffusion strategy, aiming to optimize the internationalization process and localization effectiveness of digital innovation. This paper deepens the institutional distance theory, enriches the study of digital innovation internationalization, and expands the theoretical perspectives in the fields of strategic management and international business.