Background: Integration of digital technologies in schools raises the need of students to master technological, cognitive, and social digital literacy (DL) competencies. Objectives: Based on Hofstede's dimensional paradigm for defining culture, we address the cultural context and examine perceived and actual DL of Arabic-speaking minority students in Israel. Methods: First, 402 Arabic-speaking minority students from elementary Arabic-speaking schools and 232 students from middle schools reported their DL based on the DL framework. Among them, 347 elementary and 205 middle school students performed a battery of DL tasks. Findings and Conclusions: The findings revealed a very low level of DL performance by minority students in both elementary and middle schools. The highest performance score was in information literacy: M = 1.49 and M = 1.55 out of 5.00 for elementary and middle school students respectively. Despite ubiquitous use of social networks, the lowest score was obtained in social-emotional literacy--0.23 for both elementary and middle school students. In contrast to performance, both elementary and middle school minority students estimated their digital literacy competencies as high or very high. Among the elementary students, a weak correlation was found between their DL perceptions and performance of the photo-visual, branching, and social-emotional literacies. Among the middle school students, the only significant correlation was found between perceptions and performance of reproduction literacy. The findings raise the need to improve DL competencies of minority students and develop their metacognitive abilities. This helps to assess their DL more accurately, in order to ensure their successful functioning in digital environments. Theoretical and educational implications of the findings are discussed.