<em>This study examines how social capital and digital literacy contribute to improving Micro, Small, and Medium Enterprise (MSMEs) performance and how entrepreneurial orientation acts as a mediator. The hypothesis was tested using SEM analysis. Data collection was done by distributing questionnaires using Google Forms to 400 UMKM owners in South Sulawesi. The research results show that the performance of MSMEs can be explained through social capital and digital literacy, as well as the role of entrepreneurial orientation as a mediator. The role of social capital in terms of internal and external relationships, social networks, and values and beliefs can improve MSME business performance. Apart from that, the role of digital literacy in terms of understanding information technology, communication, creating digital content, and using social media is very influential in improving the performance of MSMEs. The role of entrepreneurial orientation also indirectly mediates the relationship between social capital and digital literacy in improving the performance of MSMEs.</em>