Currently, there is a need to optimize knowledge on digital transformation in mental health care, including digital therapeutics (eg, prescription apps), in medical education. However, in Germany, digital health has not yet been systematically integrated into medical curricula and is taught in a relatively small number of electives. Challenges for lecturers include the dynamic field as well as lacking guidance on how to efficiently apply innovative teaching formats for these new digital competencies. Quality improvement projects provide options to pilot-test novel educational offerings, as little is known about the acceptability of participatory approaches in conventional medical education. This quality improvement project addressed the gap in medical school electives on digital health literacy by introducing and evaluating an elective scoping study on the systematic development of different health app concepts designed by students to cultivate essential skills for future health care professionals (ie, mobile health [mHealth] competencies). This proof-of-concept study describes the development, optimization, implementation, and evaluation of a web-based elective on digital (mental) health competencies in medical education. Implemented as part of a quality improvement project, the elective aimed to guide medical students in developing app concepts applying a design thinking approach at a German medical school from January 2021 to January 2024. Topics included defining digital (mental) health, quality criteria for health apps, user perspective, persuasive design, and critical reflection on digitization in medical practice. The elective was offered 6 times within 36 months, with continuous evaluation and iterative optimization using both process and outcome measures, such as web-based questionnaires. We present examples of app concepts designed by students and summarize the quantitative and qualitative evaluation results. In total, 60 students completed the elective and developed 25 health app concepts, most commonly targeting stress management and depression. In addition, disease management and prevention apps were designed for various somatic conditions such as diabetes and chronic pain. The results indicated high overall satisfaction across the 6 courses according to the evaluation questionnaire, with lower scores indicating higher satisfaction on a scale ranging from 1 to 6 (mean 1.70, SD 0.68). Students particularly valued the content, flexibility, support, and structure. While improvements in group work, submissions, and information transfer were suggested, the results underscore the usefulness of the web-based elective. This quality improvement project provides insights into relevant features for the successful user-centered and creative integration of mHealth competencies into medical education. Key factors for the satisfaction of students involved the participatory mindset, focus on competencies, discussions with app providers, and flexibility. Future efforts should define important learning objectives for digital health literacy and provide recommendations for integration rather than debating the need for digital health integration.