Digitalization and technological developments impact the finance and banking sectors and many other sectors. Participation banks, whose place and importance in the banking sector are increasing, are making significant strides in digitalization. With digitalization, the market share and profitability of participating banks in the banking sector have gained rapid momentum in recent years. This development makes the contribution of participating banks to financial performance important. In this context, the study aimed to examine the relationship between digitalization and the financial performance of the participation banking sector. In this direction, two research models were established. The financial performance indicator active return ratio and equity return were used as dependent variables. Mobile banking transaction volume and mobile banking transaction numbers from digitalization indicators were considered independent variables. The data for the twenty quarters between 2020Q1-2024Q4 were analyzed using the least squares method from econometric analysis methods. First, four basic pre-tests were conducted in the analysis. As a result of the pre-tests, it was determined that there was no heteroskedasticity and multiple linearity problem in both research models and that the data of the variables showed a normal distribution. However, since the autocorrelation problem was detected in both models, the robust estimator least squares technique, which provides more consistent analysis results against this problem, was applied. According to the empirical results, digitalization indicators have a statistically positive effect on the financial performance of participation banks. The results indicate that digitalization, which is among the six basic strategic goals in the participation banking sector, will strengthen the financial technology ecosystem and increase the sector's profitability. Therefore, participation banking needs to invest more in digitalization processes such as automation, artificial intelligence, and financial technology to increase the sector's profitability.