Literacy has grown from relatively a simple concept involving the basic ability to read and write to a complex concept that includes many more new competencies, such as the ability to learn about and navigate the web through critical thinking, analysis, and evaluation, the ability to collaboratively and creatively produce new content in multiple forms, and the awareness of rights and responsibilities required for ethical participation within digital environments. While much is written about new literacies in general, less scholarly attention focuses on digital literacy. The education system is a key player responsible for providing students with digital literacy skills needed for life in the 21st century through its representatives; the teachers. In order for the teachers to fulfill this task, they must be digitally literate. This rationale emerges clearly among teachers during their study for their masters’ degree as part of their professional development. In this study, we propose to shed light on both theoretical and practical aspects of digital literacy by focusing on teachers who are studying towards a master’s degree in education. We will examine teachers’ perceptions and actual performance of digital literacy within specific subjects. The assessment tool is based on previous research of Kurtz and Peled (2016), who identified seven Digital Literacies Domains (DLDs). Based on the Duning-Kruger Effect (1999), whereby people fail to adequately assess their level of competence at a task and thus consider themselves much more competent than they are, we propose to examine the expected gap between teacher perceptions and actual performance. Measuring the gap in digital literacy between perceptions and actual performance, among teachers (particularly future educational leaders engaged in a masters’ program) can help decision-makers plan tailor-made training programs based on students’ characteristics. The mixed-method methodological approach that we will develop will deepen the understanding of the research topic and create a model for further inquiry by applying quantitative measures of self-perceptions and qualitative methods of actual performances of digital literacy. Findings will enable policy makers, principals, and teachers to initiate professional development programs as part of teachers’ graduate studies and prepare teachers for teaching in the digital society. we assume that through the development of a more accurate, objective assessment tool of teachers’ DLP, as we propose to undertake in this study, we can help overcome the gap between self-perceived and actual digital literacy, thereby enabling academic institutions offering advanced teacher-training programs to develop targeted interventions that will effectively empower emerging leading teachers with digital literacy as applicable to their classroom work. Critically, we assume that effective intervention programs for such tremendously important 21st century skills can best target all teachers (not only those who self-profess to require assistance in this domain), thereby paving the way towards tackling this key need more efficiently within the education system.