This study seeks to rigorously evaluate the digital literacy of Malaysian university students, addressing a notable gap in the existing literature. As digital literacy has become a cornerstone of academic success and employability in the 21st century, it is essential to understand students’ specific competencies. This understanding is fundamental in the context of the rapid digital transformation required to succeed in our increasingly digital world. This study employs a quantitative research design involving 181 respondents and used a structured survey to measure students’ proficiency in digital literacy areas comprising communication and collaboration, digital content creation, and problem-solving. The survey explores digital literacy and the capabilities of the respondents to access digital resources. The anticipated findings provide a comprehensive overview of the current state of digital literacy among Malaysian university students and analyze the relationship between digital literacy and academic performance. The findings demonstrate that digital literacy plays a crucial role in students’ academic performance and is an influential factor in their academic success.