Artificial intelligence (AI) is transforming L2 education, yet its specific impacts on English as a foreign language (EFL) teachers and language learners' engagement remain understudied. To address this deficiency, this study, grounded in Fredricks, Blumenfeld, and Paris's (Review of Educational Research, 74, 109) three‐dimensional engagement model, explored the impacts of AI on the behavioural, cognitive and emotional engagement of EFL teachers and language learners through semi‐structured interviews with 24 EFL teachers and 38 college language learners, followed by a thematic analysis with MAXQDA to uncover the effectiveness of AI. The study found that behavioural engagement showcased the integration of AI tools, highlighting increased frequency of use and their practical applications in enhancing language acquisition tasks. Cognitive engagement was marked by the recognition of AI capacity to augment teaching strategies and learning processes, although it also surfaced concerns about the potential overreliance on technology. Emotional engagement reflected a complex interplay of attitudes, with most informants viewing AI positively but acknowledging concerns about job displacement, and its impacts on emotions of students and teachers as well as the relations between them. The study concluded that while AI held promise for L2 education, the integration must consider its limitations and ethical implications. The research provided valuable insights for educators, learners, technology developers and policymakers, encouraging innovative practices and informed decision‐making in L2 education.