The integration of artificial intelligence (AI) with gamification strategies has emerged as a transformative approach in higher education, particularly for teaching English as a Foreign Language (EFL) to university students. This article examines the theoretical foundations, practical applications, empirical evidence, benefits, and challenges of AI-powered gamification in EFL contexts. Drawing on Self-Determination Theory and Cognitive Load Theory, the discussion highlights how AI enables personalized, adaptive learning experiences through elements such as points, badges, leaderboards, and real-time feedback. Empirical studies demonstrate significant improvements in student motivation, vocabulary retention, speaking confidence, and long-term language proficiency. However, implementation in university settings requires addressing issues of digital equity, teacher training, and data privacy. The article concludes with recommendations for EFL instructors and policymakers, emphasizing the need for hybrid models that blend AI-driven gamification with traditional pedagogy to foster inclusive and effective language acquisition in diverse university environments. Future research directions include longitudinal studies on sustained learning outcomes and the ethical integration of generative AI tools.