Generative artificial intelligence (AI) tools are increasingly present in classrooms, yet both teachers and students often lack the AI literacy needed to engage with these technologies productively and responsibly. Using a tool that emphasizes student agency, scaffolds interactions, and provides authentic AI experiences, our research team aided four middle school English Language Arts (ELA) teachers in developing their own AI literacy and that of their students. Key findings from this study reveal that teachers prioritize supporting students’ understanding of AI properties, authorship, and ethical use. Students benefited from concise, developmentally appropriate AI responses, enhancing their writing skills while learning to use generative AI. The study underscores the importance of aligning AI tools with pedagogical objectives to support AI literacy development. Design implications include fostering student agency, promoting experimentation with AI, and enhancing the transparency of AI systems. This work contributes practical insights for integrating AI tools in educational settings, ultimately preparing students for future interactions with AI across contexts.