Delivery of knowledge by using many known digital tools, such as massive online open course (MOOC), is one of the well-known digital transformations in higher education. This chapter explores digital transformation’s role in higher education institutions. The chapter starts by presenting the role of digital transformation in the online learning process, where the shift of the higher education system in China moved from the traditional knowledge delivery system to digital platforms. The impact of digital transformation in higher education institutions is also discussed. Then, the chapter considers the theoretical perspective (activity theory and social interactions) used for digital transformation in educational institutions. Finally, the benefits and challenges of using the online learning process in higher education institutions are presented, and recommendations for dealing with challenges are highlighted.