This paper examines the role of institutional isomorphism in influencing digital transformation (DT) within municipalities. It addresses the gap in understanding how coercive, mimetic, and normative pressures shape municipal strategies and operations as they adopt and implement digital technologies. Through a systematic literature review and thematic analysis, the study identifies key actors in municipal DT and maps out the domains of action in which institutional pressures are influential. The findings indicate that municipal DT can be seen as a bridging-issues field, where coercive pressures often stem from regulatory mandates requiring compliance with digital standards, where mimetic pressures arise from the need to emulate successful digital practices, and where normative pressures are related to professional standards and expectations within the administrative context. The study concludes that institutional pressures significantly dictate the pace and direction of digital innovation within municipalities. Understanding these pressures is crucial for municipal leaders to effectively manage and implement DT initiatives that are both compliant and innovative. Recommendations for future research include empirical studies to validate theoretical models and explore the variability in DT across different municipalities by considering their unique environments and challenges.