Despite the rapid increase of students' enrolment in online courses, higher education institutions in Malaysia face the problem of high dropout rates of students before completing their studies and earning a degree. With a view to addressing the issue, this study focused on critical factors to evaluate the effectiveness of distance learning systems using the criteria of course satisfaction and perceived learning. Further, this study developed a research model that integrated Transactional Distance Theory, Social Presence Theory and the Online Interaction Learning Model to facilitate student satisfaction with online courses. Three hundred and three usable online questionnaires were collected from respondents at Universiti Kebangsaan Malaysia (UKM) and Universiti Putra Malaysia (UPM). The data were analysed using SPSS and Amos version 22. Results supported all direct relationships between motivation, self-efficacy, self-regulated learning, instructor immediacy behaviour, perceived learning and course satisfaction. Interestingly, perceived learning fully mediated motivation, self-efficacy, and self-regulated learning. Findings from this study on the determinants of course satisfaction do provide guidelines to institutions on significant factors to prioritise when establishing an online learning system.