In the 21st century, the concept of digital literacy (DL) has become an essential skill set that empowers educators to harness the full potential of technology in the classroom as a crucial element for teaching 21st-century skills (T21C). This study aims to explore pre-service teachers’ level of DL and their capabilities of T21C, and whether their DL level influences their capabilities of T21C. A quantitative research design was employed using SPSS 21.0 and AMOS 21.0 to conduct descriptive statistics, reliability and validity analyses, Pearson correlation, and path analysis within a structural equation modeling framework to examine the relationships among variables at a 95% confidence level. The study was conducted on 383 pre-service teachers studying at different faculties of education in Turkiye. The results revealed that the majority of pre-service teachers exhibited a moderate level of DL, but with a smaller proportion falling into the categories of low or high DL. Pre-service teachers’ overall capabilities of T21C were detected as moderate. In contrast, the majority of pre-service teachers had a moderate level of capabilities in utility of technology (UOT), collaboration (CO), and innovation and problem-solving (IP). Still, a smaller proportion was categorized as low or high. The findings also identified a significantly substantial and positive correlation between pre-service teachers’ DL and their capabilities of T21C, which indicates that as their DL levels rose, there was a corresponding tendency towards their enhanced proficiency in T21C, including the constructs of UOT, CO, and IP.