Grounded in Halliday’s Systemic Functional Linguistics and Freire’s Critical Pedagogy, the research aims to develop a transformative digital reading assessment model that embeds Muhammadiyah values and promotes critical literacy. Conducted as a four-month participatory action research project at a Muhammadiyah higher education institution in Indonesia, this study engaged 30 student participants and several community figures. Data were collected through classroom observations, focus group discussions, and interviews, and were analyzed using critical discourse analysis based on SFL's meta functions and Freirean principles. Findings reveal three key themes: first, students interpreted texts as ideological constructs by identifying field, tenor, and mode; second, students co-constructed culturally situated reading materials through dialogic engagement with community members; and third, students demonstrated critical engagement with multimodal digital texts by analyzing how visual and linguistic elements shaped meaning. This study practically contributes a contextually grounded model for reading assessment, showing how digital platforms can serve as ethical spaces for language learning that is both critical and culturally embedded.
                        
                        
                        
                        
                            
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