In the digital transformation era, technology–based services are considered significant intangible organizational assets that can enhance value creation and user experience in service institutions. This study aims to analyze the effect of service value and digital interaction as intangible capital on improving user experience in public libraries of Ilam Province, while explaining the mediating roles of perceived usefulness and perceived ease of use within the Technology Processing Model. The research is applied in purpose and descriptive–survey in method, using a correlational design. The statistical population consisted of active users of public libraries in Ilam, and based on Cochran’s formula, 380 participants were selected through multi-stage cluster sampling. Data were collected using standardized questionnaires, and construct, convergent and discriminant validity were confirmed. Cronbach’s alpha values above 0.70 indicated satisfactory reliability. Data analysis was conducted using SPSS25 and SmartPLS3.3.The findings demonstrated that service value and digital interaction have significant positive effects on user experience, perceived ease of use, and perceived usefulness. Moreover, mediating effects were confirmed, indicating that valuable services and effective digital interactions enhance user experience both directly and indirectly through improved perceptions of usefulness and ease of use. These results suggest that investment in digital service development and optimization of technological interaction can generate intangible returns, increase user satisfaction, and strengthen the experiential value delivered by Ilam public libraries. Therefore, enhancing intangible digital assets can be a strategic approach for improving service quality and advancing digital performance in public library management.