Based on Information Processing Theory (IPT), this study examines the impact of suppliers’ digital transformation (SDT) on focal firms’ green innovation (FGI) through supply chain information processing. From an information processing perspective, it identifies three boundary conditions: geographical distance, environmental regulation intensity, and analyst attention, and further analyzes how they moderate the relationship between SDT and FGI. A “focal firm–year–supplier” dataset of Chinese listed firms from 2008 to 2022 was established through data matching. A series of robustness checks and endogeneity treatments were conducted to ensure the reliability of the findings. The results indicate that SDT can significantly enhance FGI by facilitating information transmission and integration across the supply chain. Moreover, this positive effect becomes more pronounced as geographic distance decreases, environmental regulation intensity increases, and analyst attention rises; these findings provide indirect evidence supporting the information-processing in supply chain. By systematically analyzing how SDT promotes innovation performance beyond organizational boundaries through information transmission and integration, this paper reveals a novel type of interaction between suppliers and focal firms, thereby contributing to the literature on the determinants of green innovation and information spillovers.