In Sri Lanka, around 50 private and public universities enrol approximately 90,000 students every year. Paper-based examinations are still the primary method of examination in Sri Lankan universities, they consume a lot of resources and time during the examination process. Therefore, this study explores digital examination practices in Sri Lanka, where a developing country and digitalization is less implemented when compared to developed countries. The study examines the challenges and opportunities associated with the digital examination process from the perspective of university teachers. The research question addressed in this study is “What are the challenges and opportunities encountered by university teachers in Sri Lanka in the context of digital examinations?” The study follows a mixed-method strategy, qualitative method, utilizing semi-structured interviews, and quantitative method, including an online survey. A total of two interviews were conducted via video conferencing with university teachers at two universities and 34 university teachers participated in the questionnaire. The study results revealed opportunities including 1). Efficiency 2). Time savings 3). Accessibility 4). Flexibility and convenience 5). Customizing and sharing assessments instantly were mainly highlighted. Challenges including 1). Internet connectivity issues 2). Sudden power outages 3). Lack of technological devices 4). Difficulties in aligning assessments with their learning outcomes 5). Insufficient initial training and ongoing support were identified as the main reasons for hindering the adoption of digital examination methods. The research concluded the importance of addressing challenges as well as prioritizing benefits to improve the examination process in Sri Lankan universities. Besides, the study offers feasible recommendations such as addressing infrastructure issues, improving technology literacy by providing training and support, Considering hybrid models at the beginning and gradually expanding, deploying user-friendly examination platforms, and setting workshops for teachers to mitigate those challenges and enhance the overall quality standards in Sri Lankan higher education institutions.