This study examined the relationship between barangay officials’ level of understanding of the CY 2024 Seal of Good Local Governance for Barangays (SGLGB) assessment criteria and their corresponding assessment results in the municipalities of Santa Cruz and Pakil, Laguna. Specifically, it aimed to describe the demographic profile of respondents, determine their level of understanding across six SGLGB governance areas, such as Financial Administration and Sustainability (FAS), Disaster Preparedness (DP), Safety, Peace and Order (SPO), Social Protection and Sensitivity (SPS), Business-friendliness and Competitiveness (BFC), and Environmental Management (EM). Moreover, it aimed to assess the relationship between understanding and SGLGB performance and identify areas of compliance and deficiency. A quantitative-correlational research design was employed involving 384 barangay officials, including Punong Barangays, Sangguniang Barangay Members, Barangay Secretaries, and Barangay Treasurers. Data were gathered using a researcher-made questionnaire based on the CY 2024 SGLGB criteria and analyzed using descriptive statistics (frequency, percentage, mean, and standard deviation) and inferential statistics (Pearson Product-Moment Correlation). Based on the findings, the majority of respondents were middle-aged, had completed tertiary education, and had several years of experience in barangay governance. Overall, they demonstrated a high level of understanding across all governance areas, rated as Very Aware, with BFC as the least understood. However, the study showed that most relationships between understanding and actual SGLGB performance were not statistically significant. Several notable negative correlations were observed, indicating that greater understanding did not necessarily lead to better governance performance. Unexpectedly, FAS had the lowest compliance rate among the governance areas, while BFC had the highest, despite being the least understood. The study concludes that the barangay officials’ awareness of the SGLGB criteria alone may not be enough to ensure high-level SGLGB performance, as it may also be largely determined by institutional, structural, and implementation-related factors. The findings emphasize the need to bridge the gap between knowledge and actual implementation through strengthened capacity-building programs by the Department of the Interior and Local Government (DILG). It is recommended that the DILG enhance its existing training programs, intensify orientation on BFC and other technical governance areas and indicators, enhance the Barangay Information Management System (BIMS), and ensure sufficient institutional support to improve SGLGB compliance and the barangays’ overall performance.