Digital transformation has become a central agenda for higher education worldwide, and Islamic higher education institutions (IHEIs) are no exception. This article examines how digital transformation is reshaping teaching, management, and institutional identity within Islamic higher education, drawing on twenty-five recent scholarly sources published between 2022 and 2026. Using a qualitative literature review method with thematic synthesis, the study analyzes patterns across four dimensions: digital infrastructure and e-learning systems, artificial intelligence integration, institutional governance and leadership, and the preservation of Islamic values amid technological change. The findings show that while digitalization improves accessibility, administrative efficiency, and global competitiveness of IHEIs, it simultaneously exposes structural barriers such as the digital divide, uneven digital literacy among lecturers, and tension between technological innovation and religious-value preservation. The novelty of this study lies in its integrative framework that unites technological, managerial, and axiological dimensions of digital transformation, which prior studies have generally treated separately. This integrative lens offers a more holistic understanding of how Islamic higher education can pursue digital modernization without compromising its distinctive religious and moral mission. The article concludes with strategic recommendations for policymakers, university leaders, and educators to design context-sensitive digital transformation strategies for Islamic higher education institutions globally.