The rapid development of Artificial Intelligence (AI) creates opportunities for madrasahs to improve administrative processes and institutional services. However, the benefits of AI depend on institutional readiness and the ability of educational personnel to utilize digital technologies effectively. This study aims to examine the effect of Artificial Intelligence Readiness on Administrative Efficiency in madrasahs and to investigate the mediating role of Digital Competence. A quantitative explanatory design was employed involving 78 respondents from madrasahs. Data were collected using a five-point Likert-scale questionnaire and analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The findings indicate that Artificial Intelligence Readiness has a positive and significant effect on Digital Competence (β = 0.292; p = 0.009). Artificial Intelligence Readiness also has a very strong and significant direct effect on Administrative Efficiency (β = 0.951; p < 0.001). The model explains 91.1% of the variance in Administrative Efficiency (R² = 0.911). However, Digital Competence does not significantly affect Administrative Efficiency (β = 0.012; p = 0.898), and its mediating effect is not supported (β = 0.003; p = 0.902). These findings indicate that the contribution of AI readiness to administrative efficiency occurs predominantly through a direct institutional pathway rather than through digital competence. The study contributes to Islamic educational management by emphasizing institutional preparedness, technological infrastructure, organizational support, and AI integration as critical factors for improving administrative efficiency in madrasahs.