Background <p>This systematic review examines the relationship between literacy skills and digital well-being among school-age students. Digital technology has transformed education and daily life, creating opportunities and challenges. Understanding how literacy skills influence students’ ability to safely and effectively navigate digital environments is crucial for educational policy and practice.</p> Methods <p>The study followed the PRISMA 2020 guidelines and searched five databases (WoS, Scopus, ERIC, EBSCO Teacher Reference Center, and H.W. Wilson) for the relevant peer-reviewed articles. Of the 798 initial articles, 17 met our inclusion criteria. Studies were assessed using the Mixed Methods Appraisal Tool (MMAT) for methodological quality, with data analyzed thematically to identify patterns in the relationship between literacy and digital well-being.</p> Results <p>The analysis revealed four key themes: (1) digital competence correlates positively with well-being, improving psychological health, and reducing cyber aggression; (2) demographic factors influence digital well-being, with females demonstrating higher awareness; (3) educational interventions using game-based learning and augmented reality effectively improve digital literacy and well-being; and (4) online risks typically originate from immediate social environments rather than strangers, requiring a balance between the technology’s social benefits and overuse effects.</p> Conclusions <p>The findings demonstrate a strong relationship between literacy skills and digital well-being among K-12 students. Educational interventions should integrate critical thinking with technical skills, adopt gender-sensitive approaches, and address digital access inequalities. Recommendations include developing longitudinal studies across socioeconomic contexts, exploring AI’s impacts on digital well-being, and providing comprehensive teacher training to support students’ healthy digital development.</p>