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Digital technologies have penetrated all spheres of human life, becoming an integral element of sustainable development, and rural areas and agriculture are no exception. However, the processes of digital transformation possess certain challenges. Among them are ICT penetration, digital literacy of society, and the digital divide. This article aims to evaluate the digital penetration and the digital divide in rural areas of Armenia and identify and propose directions for improvement. For that purpose, a sample survey was conducted among rural households. The questionnaires included questions aimed at assessing digital literacy, as well as the level of ICT penetration and use. In addition, the Digital Devices and Technologies Usage Index (DTUI) was composed and calculated. The comparison of DTUI values revealed that being distant from the capital Yerevan can negatively impact ICT usage and digital penetration. It was revealed that households with higher incomes tend to use more ICT, which can indicate a possible positive relationship between DTUI and can be further studied by integrating econometric regression analysis. To facilitate and accelerate the processes of digital penetration and ICT use in rural areas of Armenia, relevant proposals were presented in the scope of the article. The results of this article can be useful for policymakers and the results part can be relevant for wider audiences. In particular, the recommendations presented in the article can be used by the RA Government as practical state support measures aimed at the promotion of digitalization in rural areas. Further research can include the digitalization issues in urban areas and provide insights into the digital divide between urban and rural areas. [ABSTRACT FROM AUTHOR]