This article considers how media educators can respond to the new challenges and opportunities of the Internet, and of digital media more broadly. It begins by exploring the value and limitations of the notion of "literacy" in this context. It argues that "competence-based" definitions of literacy tend to neglect the social diversity of literacy practices, and to retain a narrow focus on "information", and it suggests that a broader definition of literacy necessarily entails a more critical approach. It then moves on to consider the nature of "digital" literacy more specifically. It argues that definitions of digital literacy have tended to take a rather limited view of information, and of issues of reliability and bias, and it proposes a broader approach which recognises the social and ideological nature of all forms of mediated representation. Following from this, it then provides some concrete indications of ways in which media education approaches might be applied specifically to the analysis of the World Wide Web, using the established framework of "key concepts" (representation, language, production, audience). Finally, it considers the potential of digital media production in the classroom as a means of promoting digital literacy. It distinguishes between the approach adopted by media educators and more instrumental or expressive approaches. It then considers the difficulties of such work in a context where a "digital divide" in access to technology continues to exist, both within and between societies. It argues that the benefits of digital technology in this respect depend crucially on the pedagogic and social contexts in which such technology is used, for example, in the opportunities that are provided for collaborative production and for students sharing their work with a wider audience. The article concludes by arguing that digital literacy needs to be seen as part of a broader reconceptualisation of literacy, and of the use of technology in education. (Contains 1 note and 1 figure.)