Digital portfolios (e-portfolios) have emerged as innovative assessment tools that support authentic learning, reflective practice, competency-based evaluation, and lifelong learning. Unlike traditional assessment methods that often emphasize examination performance, digital portfolios provide comprehensive evidence of student learning, skills development, and academic growth over time. By integrating multimedia content, reflective narratives, projects, and performance artifacts, digital portfolios offer a holistic approach to assessment. This study examines the role of digital portfolios as assessment tools in higher education through a systematic review of contemporary literature. Findings indicate that digital portfolios enhance student engagement, self-reflection, critical thinking, professional identity development, and academic achievement. Furthermore, e-portfolios facilitate continuous assessment, personalized learning, and competency-based evaluation while supporting employability and career readiness. Despite challenges related to technological infrastructure, assessment consistency, and faculty training, digital portfolios represent a transformative approach to educational assessment. The study concludes that institutions should strategically integrate digital portfolios into curriculum design to support authentic and meaningful learning experiences.