Learning motivation and digital literacy have become essential factors in supporting effective learning in technology-integrated higher education environments. The increasing implementation of blended learning encourages universities to develop learning systems that can enhance students’ motivation and digital competencies simultaneously. Thus, this research examines how much blended learning increases students’ motivation to learn and how digital literacy helps university students adopt blended learning. Structural Equation Modeling–Partial Least Squares (SEM-PLS 4.1) was used to evaluate the data in an explanatory quantitative approach. 722 students from Universitas Muhammadiyah Surakarta’s Faculty of Business Economics and Faculty of Islamic Studies participated in the study. They were chosen using a straightforward random selection technique. The findings show that students’ enthusiasm for learning is greatly increased by blended learning in both faculties. Additionally, it has been demonstrated that digital literacy significantly influences how well blended learning is implemented. The outer loading, Average Variance Extracted (AVE), and composite reliability results showed that the measurement model verified that the research constructs attained appropriate levels of validity and reliability. These results imply that while digital literacy is a crucial requirement for students to participate successfully in technology-mediated learning environments, blended learning is a pertinent pedagogical strategy for encouraging students’ learning motivation.