In the current highly uncertain external environment for businesses, maintaining a single competitive advantage in the supply chain is difficult in the long run. There is an urgent need to acquire a more comprehensive and sustainable competitive advantage, and the thriving digitalization is reshaping the industry structure and competitive dynamics. This study, based on data from 255 survey responses, employs a structural equation model to examine the relationships among environmental uncertainty, digital transformation, supply chain capabilities, and sustainable competitive performance in the supply chain context. Our findings reveal the significant role of digital transformation in enhancing supply chain capabilities, which in turn positively influence sustainable competitive performance. A further analysis shows that supply chain capabilities mediate the relationship between supply chain digital transformation and sustainable competitive performance. Moreover, environmental uncertainty can serve as a driving force for digital transformation, stimulating supply chains to enhance their exploration of digitalization. This research provides valuable insights into exploring sustainable competitive performance in the supply chain context. It addresses the gap in empirical literature regarding digital transformation research and enriches the field of the contingency theory.