Against China’s tightening cultivated land ecological constraints, clarifying how the New Rural Collective Economy (NRCE) affects Cultivated Land Use Ecological Efficiency (CLUEE) is critical for advancing agricultural sustainability in the Yangtze River Economic Belt (YREB). Using 714 panel data observations from 42 prefecture-level cities in the YREB from 2009 to 2025, this study measures CLUEE efficiency via SBM-DEA and quantifies the NRCE via the entropy weight method. Two-way fixed effects models estimate the impact, while two-step mediation analysis explores underlying mechanisms. Results show NRCE significantly boosts CLUEE, with each 1-unit increase in NRCE level driving a 0.1633-unit improvement in CLUEE, and findings remain robust after endogeneity correction. Mediation analysis reveals indirect effects via land-scale management, agricultural socialized services, and green technology innovation. This study innovatively clarifies the endogenous institutional driving effect of rural collective economic reform on CLUEE, filling the research gap of ignoring rural organizational institutional factors in existing CLUEE research. The findings provide empirical evidence and theoretical support for optimizing the construction of rural collective economic organizations and formulating differentiated cultivated land ecological governance policies in the YREB, so as to effectively unlock the ecological dividend of rural institutional innovation and facilitate coordinated ecological and economic development of cultivated land.