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The purpose of this study was to investigating the dynamics and impacts of learning engagement in a digital learning environment. Learning engagement is a multidimensional concept which includes an individual’s ability to behaviourally, cognitively, emotionally, and motivationally engage in an on-going learning process. In light of previous empirical findings, we expect that learning engagement is positively related to learning performance. This study included transaction data of 13,655 students. Findings indicate that attributes of learning engagement in challenge-based digital learning environments are, as expected, positively related to learning performance. Implications point toward the need for personalised and adaptive learning environments to be developed in order to cater for the individual needs of learners in challenge-based digital learning environments.