This study investigated the relationship between the utilization of Generative Artificial Intelligence (GenAI) tools and students’ classroom engagement in a private higher education institution in Papua New Guinea (PNG). It examined how students perceived and used GenAI in their academic work and how such tools influenced their autonomy, competence, and relatedness in learning environments. A descriptive-correlational research design was employed, utilizing survey questionnaires administered to 320 students. The findings revealed that students extensively used GenAI tools and perceived them as highly useful and easy to use, with an overall weighted mean of 3.82. Likewise, student engagement in terms of autonomy and competence and relatedness was high, with a weighted mean of 3.57. Correlation analysis indicated a strong positive relationship between GenAI utilization and classroom engagement, suggesting that greater usefulness and ease of use of GenAI tools were associated with increased levels of motivation, independence, and confidence in learning tasks. The study concluded that responsible and strategic integration of GenAI enhanced learning experiences and academic outcomes. Moreover, it highlighted the importance of institutional policies and capacity-building initiatives to ensure ethical and equitable use of AI in education. The research further led to the development of a policy brief designed to guide higher education institutions and policymakers in implementing GenAI to foster student engagement and digital transformation within PNG’s higher education sector