Abstract: To address the lack of farmers' subjectivity in improving the village living environment, the points system has been increasingly applied in practice. Examining the effectiveness and mechanism of the points system is highly important for improving the participation mechanism of farmers. In this paper, an analytical framework based on the theory of collective action is constructed, and the effects of the points system on farmers' participation in improving the village living environment are empirically investigated using microsurvey data from 607 farmers in the mountainous areas of western Hubei. By employing an ordered Logit model, propensity score matching (PSM), and a chained mediation model, it is found that the points system significantly promotes farmers' participation in improving the village living environment. This conclusion remains robust even after endogeneity is addressed with PSM. Beyond direct incentives, the system also promotes collective action in village living environment improvement through a chained mediation effect of institutional supply, mutual supervision, and credible commitment. Furthermore, the richer a village's social capital and the greater its participation in digital governance are, the stronger the mobilization effect of the points system on farmers' participation in improving the village living environment. Therefore, it is essential to emphasize the logic of autonomous governance in implementing the points system, actively cultivating village social capital, and ensuring the compatibility between the digital management of the system and farmers' digital literacy.