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During the COVID‐19 crisis, digital informal learning is important for students' academic engagement. Although scholars have highlighted the importance of students' digital competence in improving digital informal learning (DIL), the mediating role of DIL between digital competence and academic engagement has remained ambiguous. The purpose of this study is to investigate the relationship between students' digital competence and their academic engagement with the mediating role of DIL in the higher education context. This study used a descriptive correlational design, and the data were analyzed using structural equation modelling (SEM). The study sample included 308 students from Shiraz University, Iran. The results showed that digital competence positively and significantly correlated with students' DIL and their academic engagement. Furthermore, DIL, as the mediator variable, was found to mediate the relationship between students' digital competence and their academic engagement. Since higher education institutions have a key role in improving students' academic engagement, particularly in the COVID‐19 pandemic, academic administrators should pay more attention to students' digital competencies and provide them with efficient and user‐friendly DIL platforms that can increase their academic engagement. Lay Description: What is already known about this topic: One of the challenges of online learning environments is students' engagement especially in the COVID‐19 crisis.The role of digital informal learning (DIL) in the students' engagement is ambiguous.Little work has been done to support the relationship between digital competence, DIL and academic engagement. What this paper adds: The structural equation model of academic engagement, digital competence, and DIL was examined.There is a significant relationship between digital competence and DIL of students.The engagement of students will increase both with the use of digital competencies and DIL. Implications for practice and/or policy: Administrators should provide efficient DIL platforms to increase students' academic engagement.Educators should consider students' digital competencies to increase their academic engagement. [ABSTRACT FROM AUTHOR]