As digital tools have become important components for sustaining competitiveness, this research investigated how digital technology knowledge, digital skills, digital usage, and digital adaptation contribute to the stability of agro-food SMEs in Kuala Nerus, Malaysia. SMEs in the agro-food sector recognize the value of digitalization, but many also experience ongoing challenges to integrate digital solutions for operations. In particular, due to limited digital knowledge, a lack of technical skills, and un-reliable usage, many businesses are not achieved their initial intended benefits of digital tools to enhance performance and reach sustainable growth. This study adopts a quantitative approach involving survey data from owners and managers of SMEs to investigate how each digital factor relates to SME stability. Overall, the results showed that SMEs with a greater knowledge of digital tools' capabilities and practical skills tended to improve digital usage leading to greater digital adaptation for business processes. Having capabilities to implement and change business processes accordingly, improved an SME's overall stability by leading to improved supply chain management, greater market presence, and better reactions to changing market conditions. Therefore, the findings emphasize the need to develop technical capabilities as well as a supportive organizational culture for developing digital transformation. It is clear these findings illustrate both the capabilities of businesses and, just as importantly, the organizational culture that accompanies them, and its role in terms of digital transformation. As indicated in our research, it is important that policy makers and support agencies pursue actionable recommendations, for example targeted training programs, incentives, and awareness, to assist agro-food SMEs in moving towards greater digital capabilities and resilience. Furthermore, our analysis of knowledge, skills, use, and adaptation at the same time provides valuable insights about leveraging digital transformation and SME stability for sustainable growth in Malaysia. Information from this project also adds to the discussion on digitalisation as it relates to SMEs while laying, the groundwork for future research and practice aspects.