Human-Computer Interaction (HCI) is currently undergoing profound shifts, moving from graphical user interfaces (GUIs) toward natural or conversational interactions with “Digital Beings”. These digital human models (DHM) or Avatars are no longer confined to human factor applications, entertainment, and digital social activities, but emerging fields such as marketing, education, training, and digital healthcare. However, technological advancement and adoption have outpaced the empirical and theoretical understanding of perception and User Experience (UX) surrounding these DHMs. Consequently, design choices for digital human avatars are often arbitrary, tech-or budget-driven rather than evidence-based.To address this, this systematic literature review aims to contribute to a holistic understanding of avatar-mediated interactions and experiences through analysis of digital human research from 2015 to 2025 following the PRISMA statement. It explores the factors impacting user perception and UX of digital human avatars by analyzing endpoints, methodologies and contexts of empirical user studies, and synthesizes findings on top through thematic analysis of previous systematic reviews, meta-analyses and theoretical frameworks. This review finds major gaps in determining the optimal level of avatar characteristics such as realism, stylization and familiarity, their nuanced relationship to user acceptance, comfort, trust, engagement and various other outcomes. Furthermore, this review illustrates the limitations of conventional usability and UX metrics for avatar-mediated interaction, which inherently involves social and cultural aspects. This review necessitates the development of new, context-aware and adaptable frameworks to measure both the perceptual dimensions of digital human avatars and the experience mediated.