Based on the panel data of 7 counties and 1 city in Xiangxi Prefecture from 2015 to 2021, a comprehensive digital economy index system was constructed, the entropy value method was used to measure its digital economy development level, and the spatial difference and dynamic distribution of the digital economy development level of Xiangxi Autonomous Prefecture were analyzed by using the natural discontinuity grading method and kernel density estimation method in ArcGIS. It is found that the level of digital economy development in Xiangxi Autonomous Prefecture shows an upward trend during 2015-2021, digital infrastructure and digital applications have a greater impact on the level of digital economy development. In terms of spatial distribution, the level of digital economy in Xiangxi Prefecture continues to rise during 2015-2021, and Jishou City, which is at a high level of digital economy development, plays the role of radiation and diffusion. From the results of dynamic evolution, the phenomenon of low-level aggregation and polarization of the digital economy level in Xiangxi Prefecture has been alleviated. Finally, based on the findings of the study, countermeasures and suggestions are proposed to promote the level of digital economy development.