(1) Background: The rapid development of information technology has changed the traditional concept of space, gradually shifting the "container space" to the "relational space" . The constraints of geographical spatial elements are diminishing, and the theory of virtual agglomeration is gaining attention. (2) Methods: In this study, we constructed an evaluation system for virtual agglomeration, comprising four primary indicators: virtual infrastructure level, virtual output level, virtual input level, and virtual service level. The TOPSIS method was used to calculate the virtual agglomeration level for each province, and the DEA-Malmquist method was employed to measure provincial total factor productivity (TFP) in China. Using panel data from 30 provincial regions in China from 2013 to 2021, we examined the mechanism and impact path of virtual agglomeration on TFP. (3) Result: There is an inverted U-shaped relationship between virtual agglomeration and TFP in China. The overall development level of virtual agglomeration is relatively low, within the range where the marginal effect of virtual agglomeration on TFP is positive but diminishing, indicating significant potential for further development. The impact of virtual agglomeration on TFP is stronger in the Yangtze River Economic Belt compared to non-Yangtze River areas, and the highest stable point of TFP is higher in central provinces than in eastern and western provinces. (4) Conclusions: This study provides a theoretical basis and practical reference for improving the level of virtual agglomeration .