This study examines how theatres interpret, govern, and strategically integrate digital technologies and knowledge practices in the context of mission-driven value creation. While digital transformation is often associated with efficiency gains and technological change, less attention has been paid to how digital knowledge is embedded in organizational practices and contributes to cultural and social value in non-profit contexts. Drawing on 28 semi-structured interviews with theatre professionals across Europe, the study applies an inductive qualitative approach inspired by grounded theory to explore how digitalization unfolds in practice. The findings show that digitalization is primarily embedded in operational and support activities, where digital tools function as knowledge infrastructures that enhance communication, coordination, and audience engagement. Rather than being driven mainly by efficiency, these practices contribute to public value by extending access, sustaining relationships, and reinforcing theatres’ cultural missions. At the same time, digital transformation remains incremental and selective. More advanced forms of transformation – defined as the strategic integration of digital knowledge into governance and value creation – are limited, as digital practices are typically embedded within existing institutional frameworks shaped by legacy structures and public value orientations. Digital experimentation supports organizational learning but remains largely project-based and weakly institutionalized. Overall, the study shows that digital transformation in theatres primarily reinforces existing value creation logics rather than redefining them. It contributes to the literature by conceptualizing digital transformation as a knowledge-based, value-oriented process shaped by governance, institutional logics, and organizational capacities, offering insights into how mission-driven organizations navigate digital change beyond market-based contexts.