The digital technologies have dramatically transformed organizational learning, workforce development and performance management in any industry mainly due to the rapid growth of the same. Digital learning has become a strategic instrument to improve worker capability and productivity in the urban development sphere in Malaysia in terms of infrastructure growth, smart city projects, and changes in the work process based on technology. This paper investigates the relationship between digital learning and worker performance which is mediated by the capability development, as well as it evaluates the moderating effect of digital transformation and Human Resource Development (HRD) support. Based on a conceptual and empirical framework, which rests on human capital theory and dynamic capability theory, the research examines the role of digital learning efforts in skill improvement, flexibility, and employment performance. Structural equation modeling was used to analyze data gathered on professionals, who were employed in the urban development industry in Malaysia. The results indicate that online learning has a positive impact on the performance of workers, and capability building is a strong mediator. Moreover, the connection between digital learning and the development of a capability is reinforced by organizational digital transformation and HRD assistance. The research provides good insights to policy makers, human resource practitioners and urban development companies that want to maximize the performance of their workforce in digitally changing settings