The present study investigated the effect of digital badges on students' intrinsic motivation and self-efficacy. To answer the research questions of the study, a mixed-method research design was adopted. The sample of the study consisted of 49 students who were selected purposively from the Instructional and Learning Technology Program at Sultan Qaboos University. The participants were registered in the Photography in Education Course (Tech 2113) and Quality Assurance and Control Instruction Course (Tech 4211) in the academic year 2017-2018. All participants functioned as the experimental group. The assessment activities with digital badges represented the treatment in the one-group pretest-posttest experiment design. Instruments of data collection for this study constituted questionnaires for intrinsic motivation and self-efficacy, and a focus group interview. Both questionnaires were used before and after the treatment. The focus group interview with 7 participants was conducted then to look further into the participants' experiences with digital badges in their courses. The questions of the interview fell into three themes, challenges, values and suggestions. The result of the study can be summed up as follows: Earning digital badges has positively affected the participants' intrinsic motivation and self-efficacy by enhancing significantly their scores in the post-test's result after they had earned the digital badges. Statistically there was no significant differences between males and females in terms of was intrinsic motivation and self-efficacy. The effect of digital badges on both gender groups were the same. There were statistically significant differences in intrinsic motivation and self-efficacy of younger cohorts and older cohorts in favor of younger cohorts only before earning digital badges in the pre-test results. However, after earning digital badges, both had the same results in the post-test. Digital badges' visual appearance plays a key role in attracting students. Digital badges are seen by students as a reinforcement element. Displaying badges to the public and exporting them outside their learning context is important to students. In light of the research findings, implications and recommendations for future research were outlined. Key words: digital badges, internal digital badges, instructional digital badge, competency-based education