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The integration of Artificial Intelligence (AI) in English language teaching and learning has become an emerging trend in global education. This study investigates the perceptions and experiences of students and teachers regarding the use of AI tools in English language classrooms at local universities in Northern Vietnam. Using a mixed-methods approach, data were collected from 500 non-English major students and 20 English teachers, along with interviews from educational managers and employers. The findings reveal that AI-supported tools such as ChatGPT, speech recognition software, and AI-based writing assistants significantly enhance students’ engagement, language skills, and self-directed learning habits. However, challenges such as limited digital literacy, infrastructure constraints, and concerns about academic integrity persist. The paper highlights the importance of teacher training, ethical AI use, and policy support to ensure effective AI integration. This research contributes to the growing body of knowledge on competency-based education and proposes recommendations for optimizing AI implementation in English language instruction in local higher education contexts.