<p>Assessment literacy is a critical component of effective teaching, particularly in English for Academic Purposes (EAP) contexts, where assessments significantly influence instructional decisions and student outcomes. This mixed-methods study investigates the impact of Teacher Development Courses (TDCs) on improving the assessment literacy of Iranian in-service EAP instructors, with a focus on formative assessment principles, digital tool integration, and systemic barriers. Quantitative analysis of pre- and post-training assessments revealed significant improvements in participants’ knowledge and skills, particularly in designing valid assessments (mean difference = + 7.3,&#xa0;<i>p</i> &lt; .001,&#xa0;<i>d</i> = 1.62) and applying formative feedback (mean difference = + 6.5,&#xa0;<i>p</i> &lt; .001). Qualitative findings from interviews highlighted increased teacher confidence and adoption of student-centered practices, though systemic challenges—including high-stakes testing cultures (reported by 91.7% of participants), institutional resistance (83.3%), and resource constraints (80%)—hindered full implementation. Notably, teaching experience mediated TDC effectiveness: novice instructors (3–10 years) demonstrated the most substantial gains (<i>M</i> = + 22.3), while veterans (21 + years) showed more limited improvement (<i>M</i> = + 14.5), often citing entrenched institutional norms as barriers. Digital tools presented both promise and challenges, with 74% of teachers reporting post-training confidence in using platforms like Moodle (<i>M</i> = 3.8) and Google Classroom (<i>M</i> = 4.0), yet only 23% achieving regular classroom integration due to infrastructural limitations. These findings contribute to the global discourse on assessment literacy by offering context-specific insights for exam-driven environments. The study concludes with recommendations for differentiated teacher training models, policy reforms to support formative assessment, and targeted investments in digital infrastructure.</p>