The proliferation and increasing accessibility of large language models (LLMs) have led to a paradigm shift in natural language processing. This shift offers new possibilities for artificial intelligence (AI) to transform the production (output) and consumption (input) of language in digital environments, as well as for the use of AI by teachers and learners in language education. Expanding definitions of new literacies to include emerging forms of human-AI interaction and collaboration in meaning-making processes is essential for this transformation. Unlike broader AI literacy practices that encompass general interactions with AI or Conversational AI Literacy focused on verbal exchanges, AI-generation literacy for language education refers explicitly to acquiring the knowledge, skills, and competencies needed to effectively create AI-generated content for use in language education. This entry introduces a 4I (Identify, Interact, Interpret, Integrate) framework for developing AI-generation literacy grounded in ethical and responsible use principles. A roadmap for elevating AI-generation literacy is provided, outlining skills and competencies for novice, intermediate, and advanced levels. This entry also includes a practical example demonstrating the application of the 4I approach in an authentic learning scenario.