Digital transformation has brought significant changes to Islamic education, particularly in the use of technology as a learning medium, learning resource, and means of educational interaction. This transformation provides opportunities to improve learning flexibility, accessibility, interactivity, and variety, while simultaneously creating challenges for students’ character development. This study aims to analyze the transformation of Islamic education in the digital era, identify the challenges and opportunities that emerge, and formulate strategies for strengthening students’ character through the appropriate use of technology. The study employed a qualitative approach using a literature review method. Data were obtained through the identification and analysis of relevant scholarly articles addressing the digitalization of Islamic education, digital learning media, digital literacy, digital ethics, character education, and technology integration in Islamic education. The data were analyzed descriptively through the stages of identification, categorization, interpretation, and synthesis of information from relevant sources. The findings indicate that digital transformation enables the use of online learning platforms, interactive media, digital learning resources, and educational applications that can expand access and provide more diverse learning experiences. However, the transformation also presents challenges, including unequal access to technology, limited teachers’ digital competence, inadequate digital literacy, exposure to negative content, and ethical issues in digital environments. Character development requires the integration of Islamic values with digital literacy and ethics, teacher role modeling, positive behavioral habituation, and collaboration among schools, families, and communities. Therefore, the transformation of Islamic education should maintain a balance between technological innovation and Islamic values so that technology functions as a means of learning that supports the development of students who are faithful, responsible, ethical, and morally grounded.
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