Information services in libraries have been developed, and new services have emerged as a result of the revolution of information technology and communication. One of these services is Digital Reference Service (DRS). This study aims to identify the reality of the DRS that is being used by postgraduate students at Sultan Qaboos University (SQU), which provided by the main library at the university, and the challenges that are facing references librarians in providing this service. The study utilized content analysis method for gathering data from SQU library website, and used questionnaire to collect data from 313 Master's and Doctoral students. Moreover, semi-structured interviews were conducted with reference librarians in order to clarify specific aspects of the topic. The most important findings of the study are as follows: There is a low awareness of digital reference services among students. Only 16% of sampled students indicated that they already have used the service. E-mail was identified as the most important method to require the service, followed by Instant Messaging and Facebook . However, it seems that there is a satisfaction about the service among the service users, which is considered high rate. On the other hand the study indicates many obstacles that are facing service providers' at the library including: Lack of awareness on the existence of the service; lack of qualified staff and lack of efficient marketing and instructions of using the service. In light of findings, The study recommends the following: 1.Establishing efficient service marketing plan 2. Teaching information literacy for postgraduate students with a focus on digital reference service 3. Training staff for providing better digital reference services 4. Implementing guidelines of the global reference services and facilitating proper cooperation plan among university libraries in Oman.