This paper investigates the spatial mechanisms and impacts of land transfer on green total factor productivity (GTFP) in the economically dynamic Yangtze River Delta region of China. Using urban-level panel data from 2007 to 2020 and applying spatial econometric models, the study examines the relationship between land transfer and GTFP. The results of the spatial econometric analysis show that land transfer in the overall Yangtze River Delta region contributes positively to the improvement of GTFP. The mediating mechanism of industrial restructuring and upgrading shows statistically significant effects. Further investigation reveals differences in the spatial interdependence of land transfer on the GTFP among cities in different regions. Land transfer in the core area has significant indirect effects on the GTFP of neighboring cities, while the impact of land transfer in peripheral cities on the GTFP of surrounding cities is less discernible. This suggests that there is still a need for further deepening and development of integration in peripheral cities, as factor integration is still insufficient. The findings of this study provide useful insights for local governments in optimizing land transfer practices and promoting industrial transformation, upgrading, and sustainable green development.