This study investigates the economic and ecological impacts of straw returning technology among apple growers in Shaanxi and Gansu provinces, China. Using Propensity Score Matching (PSM) and survey data, the findings reveal that straw returning significantly increases farmers’ incomes by 20.33% compared to those who do not adopt the technology. Additionally, the technology mitigates soil fertility decline by 11.07%, offering substantial ecological benefits. The heterogeneity analysis highlights that older farmers benefit more from the technology in terms of both income and soil fertility improvement, likely due to their experience and reliance on farming. Smaller-scale farmers also show greater gains in income and soil health, while larger-scale farms face complexities that may delay visible benefits. However, land fragmentation did not significantly influence the outcomes. The study recommends promoting straw returning through enhanced farmer training, financial incentives, and improved access to credit. Policymakers should consider tailoring support to different farmer demographics and orchard sizes. Future research should focus on long-term evaluations of straw returning’s sustainability in terms of soil fertility and crop yields. Overall, straw returning technology offers a promising solution for enhancing both economic returns and environmental sustainability in apple production.