Abstract: In recent years, with the rapid development of new technologies such as big data, artificial intelligence and cloud computing, the digital economy has deeply integrated with the real economy. The digital economy has become a new wave, a new driving force and a new engine leading economic development. With the vigorous development of digital economy, China’s income distribution pattern has also seen new changes. In recent years, the labor income share has shown a new trend of turning from declining to rising, and the labor-capital distribution relationship has improved. Therefore, this paper puts forward two important questions: Is there a significant relationship between the new change in China’s labor income share in recent years and the improvement of the degree of digitalization? What channels does digitalization promote the increase of labor income share? This paper uses the micro level data of A-share listed companies in Shanghai and Shenzhen in China, adopts the method of combining text analysis and manual judgment, and constructs indicators to measure the degree of enterprise digitalization from the two dimensions of digital intangible assets and digital keywords. The research finds that the labor income share presents an “inverted U-shaped” downward relationship with the increase of digitization degree. The mechanism test shows that the “inverted U-shaped” effect of digitalization on skill structure is an important path for digitalization to affect labor income share. Further research shows that the digitalization degree of listed companies at the present stage is on the left side of the “inverted U-shaped” curve, and the improvement of digitalization degree will still help to improve labor distribution relations in the future. The “inverted U-shaped” effect of different factor intensities and ownership of listed companies on labor income share is significant. The innovation of this paper mainly includes the following two aspects: First, this paper finds that booming digitalization is promoting the increase of labor income share, which provides important evidence to explain the new change of the increase of labor income share in recent years. Moreover, it is expected that in the future period of time, the improvement of digitalization degree will continue to drive the rise of labor income share. Second, from the perspective of skill structure, this paper discusses the important mechanism of the influence of digitalization on the “inverted U-shaped” labor income share. Accelerating the upgrading of labor skill structure will help to continuously increase the labor income share, and provide feasible solutions for the continuous improvement of labor distribution relations. This paper recommends that the government should continue to accelerate the construction of digital-related infrastructure and increase the support for enterprises’ digital transformation. Enterprises should regularly organize employees to participate in digital training and promote the upgrading of workers’ skill structure.