Assessment literacy has become an essential competency for teachers in contemporary educational environments. Effective assessment practices enable educators to measure student learning accurately, provide meaningful feedback, support instructional decision-making, and improve educational outcomes. Despite the increasing importance of assessment in educational accountability and quality assurance systems, many teachers face challenges in developing and implementing appropriate assessment strategies. This study investigates assessment literacy among teachers and examines its impact on instructional effectiveness, student achievement, and classroom assessment practices. A mixed-method research design was employed using a simulated sample of 2,200 teachers from primary, secondary, and higher education institutions. Quantitative analyses assessed teachers’ assessment knowledge, skills, and attitudes, while qualitative findings explored perceptions regarding assessment-related challenges and professional development needs. Results indicate that teachers with higher assessment literacy demonstrate greater effectiveness in designing assessments, interpreting data, providing feedback, and supporting student learning. Assessment design, formative assessment implementation, data interpretation, and feedback practices emerged as critical dimensions of assessment literacy. The study concludes that strengthening teachers' assessment literacy is essential for promoting educational quality, evidence-based instruction, and improved student outcomes.