Digital literacy has become an essential competency for university students in the twenty-first century. The increasing integration of digital technologies into education, communication, research, and professional environments necessitates the development of advanced digital skills among learners. This study investigates the level of digital literacy among university students, identifies key determinants influencing digital competence, and explores challenges encountered in digital learning environments. A mixed-method research design involving 500 undergraduate and postgraduate students from multiple universities was employed. Quantitative survey data and qualitative interviews were analyzed to assess students' digital knowledge, information literacy, communication skills, cybersecurity awareness, and technological adaptability. Findings reveal that while students demonstrate strong basic digital skills, significant gaps exist in critical information evaluation, cybersecurity awareness, and advanced digital content creation. The study emphasizes the importance of institutional interventions, curriculum integration, and digital literacy training programs to prepare students for academic success and future employment. The findings contribute to the growing body of literature on digital transformation in higher education.