Background: The increasing use of devices such as tablets, smartphones, and computers has significantly changed how children engage with their surroundings, often replacing traditional play activities. These digital tools can have both beneficial and adverse effects on child development. Objective: This study aimed to assess digital technology use among preschool children in an urban community based on parents’ observations. Methods: A descriptive cross-sectional study was conducted from January 2024 to November 2024 in selected schools in Dhaka City, Bangladesh (YWCA Higher Secondary Girls School, Assemblies of GOD Church School, Silverdale Preparatory Girls High School, and Zamzam Point International School & College). A total of 123 parents of preschool children aged 3-6 years participated using a purposive sampling technique. Data were analyzed using MS Office and SPSS version 26.0. Results: Of the 123 participants, 83.7% were women. Most mothers (60.2%) and fathers (78%) were aged 20-30 years. While 48.8% of parents reported that their children began using digital devices between the ages of 3 and 4, 69% noted use for social media. Half of the children used digital devices for about two hours daily. Reported adverse effects included sleep disturbances (40.7%), headaches (36.6%), body aches (35.5%), and behavioral issues like restlessness (49.6%). Parents felt digital overuse reduced study time (64.2%) and creativity (63.4%). Conclusion: Digital technology significantly influences preschoolers’ physical, psychological, and social health. Parental monitoring, awareness, and promotion of balanced lifestyles are essential. Broader studies are recommended for generalizability.