Abstract: Digital Financial Inclusion (DFI) has emerged as a critical driver of rural entrepreneurship. Exploring its impact on rural households' entrepreneurial behaviors and performance, as well as the underlying mechanisms, holds great importance for driving stable rural economic growth. Based on data from the China Family Panel Studies (CFPS) and the Peking University Digital Financial Inclusion Index, this paper studies how DFI influences rural households' entrepreneurial behavior and performance. The results demonstrate that DFI not only directly enhances rural households' entrepreneurial engagement and performance but also exerts positive influences by alleviating financial capital and social capital constraints. Sustained positive effects of DFI on entrepreneurial behavior over the long period. Heterogeneity analysis indicates that DFI exerts greater influence on entrepreneurial behaviors among high-income and highly educated groups, and showing more pronounced effects on entrepreneurial performance in low-income and less educated households. Geographically, the influence of DFI diminishes across central, eastern and western regions in China. To invigorate the level of rural innovation and entrepreneurship and promoting sustainable rural economic development, the study proposes policy recommendations including advancing the penetration and development of DFI in rural areas, and strengthening the cultivation of rural households' financial and social capital.