The rapid advancement of digital technology has driven the digital transformation of education, with teachers’ digital literacy being a key factor in this process. However, policymakers and educators concern how to develop digital literacy effectively. This study aims to explore the challenges encountered in the development of digital literacy from the perspective of student teachers. We firstly interviewed 10 student teachers, then analyzed the qualitative data employing grounded theory techniques. The findings revealed three primary categories that influence the development of digital literacy among student teachers: individual factors, pedagogical factors, and environmental factors. Under these categories, six sub-themes emerged: personal traits, personal choice, availability of theoretical courses, availability of practical trainings, resource availability, and marketing and advocacy. The findings give a detailed view of the problems student teachers face in developing digital skills. They help policymakers and educators solve these issues, so teachers can better contribute to digital education transformation.