The problem addressed in this research is the suboptimal use of digital media for marketing educational services at Muhammadiyah Boarding School (MBS) Yogyakarta, resulting in a less than significant increase in new student admissions. This study aims to explore the influence of digital marketing and service innovation on the acceptance of new students at MBS Yogyakarta, with ICT literacy as a mediating variable. Despite advancements in technology and the availability of various digital media for marketing, MBS Yogyakarta primarily relies on traditional methods such as brochures and word-of-mouth for new student admissions, leading to stagnation in growth. The study seeks to answer how digital marketing affects the acceptance of new students, its impact on ICT literacy, how service innovation influences acceptance, and its impact on ICT literacy. Using an ex-post-facto qualitative approach, the research involved 81 individuals, including school leaders, foundation administrators, teachers, and new student acceptance committee members, employing a saturated sampling technique. Data was collected via questionnaires and analyzed using descriptive analysis and the Structural Equation Model (PLS). The findings reveal that digital marketing significantly impacts the acceptance of new students and ICT literacy and that service innovation similarly positively affects both. Furthermore, ICT literacy mediates the effectiveness of digital marketing and service innovation in increasing new student admissions. The study concludes that digital marketing and service innovation are crucial for increasing new student admissions, with ICT literacy serving as a key mediating factor, suggesting that improving ICT literacy can further enhance the effectiveness of these strategies.