The global competitiveness of small and medium enterprises (SMEs) increasingly depends on their ability to undergo successful digital transformation. This study investigates the key factors influencing the success of digital transformation initiatives among SMEs in Selangor, a state that significantly contributes to Malaysia’s GDP. A theoretical framework was developed, focusing on five independent variables: top management support, IT capacity, organizational preparedness, employee participation, and government involvement. The study employed a quantitative approach, gathering primary data from 188 IT employees and managers in Selangor-based SMEs through a structured Google Forms survey. Data collection was facilitated by snowball and non-probability purposive sampling techniques, with responses measured using a 5-point Likert scale. The data were analyzed using SPSS version 27, employing multiple regression, Pearson correlation, summary analysis, and reliability testing. The results reveal that all five factors positively influence the success of digital transformation in SMEs. Among these, employee participation emerged as the strongest predictor, while government involvement had a moderate effect. These findings provide valuable insights for SMEs, investors, government bodies, and academic researchers, offering practical guidance on implementing effective digital transformation strategies. The study also acknowledges certain limitations and provides recommendations for future research to build on and improve the understanding of digital transformation in SMEs.