Abstract: With the advancement of agricultural modernization, the concept of green development has become mainstream, making the improvement of agricultural green total factor productivity (AGTFP) a pivotal challenge. Academic debate persists regarding the mechanisms through which agricultural insurance affects AGTFP. Based on the SBM-GML index, this study measured the level of GTFP in China’ s agriculture from 2013 to 2022. Using two-way fixed effects and mediating effect models, it systematically examined the impact of agricultural insurance on AGTFP and investigated the underlying mechanisms. The results indicated: (1) Agricultural insurance not only directly stimulated the growth of AGTFP but also indirectly boosted it by promoting agricultural technological innovation, with the mediating effect accounting for 15.59% of the total effect. (2) The advancement of industrialization and urbanization significantly enhanced AGTFP. (3) Agricultural insurance exerted a statistically significant positive impact on AGTFP in western China, whereas no statistically significant effect was observed in the central and eastern regions. In response to this situation, this paper proposed recommendations such as further improving the agricultural insurance system, continuously advancing agricultural technological innovation, and promoting coordinated regional development of green agriculture, thereby providing robust support for achieving rural revitalization.