Background <p>Digital literacy is a critical competency in 21st-century medical education, enabling students to leverage technology (e.g., electronic health records, virtual simulations) for clinical practice, research, and lifelong learning. However, resource-constrained regions like Azad Jammu and Kashmir (AJK), Pakistan, with limited digital infrastructure and training capacity, lack data on students’ digital readiness.</p> Objectives <p>To assess digital literacy awareness among undergraduate medical students in AJK and examine associations between digital literacy and student demographics.</p> Methods <p>A cross-sectional survey was conducted among 377 students from four medical colleges in AJK using a validated 24 item questionnaire covering seven digital literacy domains. Stratified random sampling ensured representative demographics. Data were analyzed using SPSS v26, with descriptive statistics, independent t-tests, and one-way ANOVA and Pearson correlations.</p> Results <p>Students reported high confidence in basic skills such as learning new technologies (73.2%) and using communication platforms (57.8%) but limited awareness of programming (11.1%) and cybersecurity (43%). Male students had higher beginner-level scores than females (24.83 ± 4.51 vs. 23.48 ± 4.30; <i>p</i> = 0.003). First-year students demonstrated significantly higher advanced-level awareness compared with final-year students (36.88 ± 5.71 vs. 33.67 ± 6.05; <i>p</i> = 0.014). Age showed a small negative correlation with beginner (<i>r</i> = − 0.125) and advanced (<i>r</i> = − 0.116) scores. Male, first-year, and younger students performed better in digital literacy assessments (<i>p</i> &lt; 0.05).</p> Conclusion <p>Medical students in AJK possess foundational digital literacy and ethical awareness but lack proficiency in advanced domains such as programming, AI, and cybersecurity. Tailored curricular reforms and institutional support are urgently needed to prepare future physicians for technology-driven healthcare.</p>