Digital literacy not only plays a crucial role in students' academic performance but also their future job prospects. This study investigates students' digital literacy level and its relationship with their academic performance. Furthermore, it compares the digital literacy level between male and female students. Using the Digital Literacy Scale (DLS), data were collected from 663 students enrolled in an online university in Pakistan, while their CGPA was used to measure their academic performance. The results showed that overall, students exhibited a high level of digital literacy. In one dimension (Creativity), they reported a low perception degree; while in others, their perception degrees were moderate (Copyright, Critical Thinking, Character, Connectedness, and Collaboration), high (Communication and Curation), and very high (Citizenship). Female students reported a lower level of digital literacy than males. A positive week, but a significant correlation was observed between their digital literacy and academic performance, thus suggesting that digital literacy plays a significant role in students' academic performance. The results would be useful for the academicians and education authorities to develop relevant courses for positive student outcomes.