Digital transformation represents a fundamental shift in how businesses integrate digital technologies to reshape processes, culture, and customer experiences. For U.S. Small and Medium Enterprises (SMEs), this transformation serves not merely as a technological upgrade but as a critical strategic tool for enhancing operational efficiency and securing competitive advantage in an increasingly digital economy. This paper examines the empirical evidence on how U.S. SMEs are leveraging digital transformation—including the adoption of cloud computing, data analytics, Internet of Things (IoT), and automated workflow systems—to streamline operations, reduce costs, and improve productivity. The analysis synthesizes findings from recent industry case studies, surveys, and academic research, revealing that SMEs which strategically implement digital tools achieve significant gains in supply chain optimization, inventory management, customer relationship management, and internal communication. Key drivers of success include leadership commitment, a culture of digital agility, and targeted investments in scalable technologies. However, the evidence also highlights persistent barriers such as limited capital, cybersecurity concerns, and skills gaps that can hinder effective adoption. The study concludes that for U.S. SMEs, digital transformation is a potent catalyst for operational efficiency, but its benefits are maximized when aligned with clear strategic objectives and organizational readiness. The findings offer insights for SME owners, policymakers, and technology providers aiming to support the digital maturation of this vital sector of the U.S. economy.