This chapter presents findings from a participatory needs assessment exploring generative AI literacy in higher education. Using Rothman’s (Action evaluation and conflict resolution training: Theory, method and case study. International Negotiation, 2(3), 451–470, 1997) action evaluation framework, we conducted a campus-wide survey and follow-up interviews to surface student, faculty, and staff perceptions of generative AI. The project was co-led by an undergraduate researcher, who helped design instruments and conduct interviews—reducing power dynamics and fostering open dialogue. Results revealed a notable gap: students used generative AI informally and creatively, while faculty expressed concern about academic integrity, misinformation, and limited guidance. Yet both groups expressed strong interest in training and support. In response, we launched the AI Café, a student-led initiative offering localized, peer-created resources to promote responsible AI use. This chapter underscores the value of participatory approaches, especially in smaller, teaching-focused institutions, and illustrates how undergraduate research can drive responsive, community-centered action. It argues that AI literacy is not just technical—it is relational, requiring trust, peer modeling, and sustained, critical dialogue.