As artificial intelligence (AI) increasingly influences education, understanding learners' experiences, engagement and literacy of these tools is critical. This study explores AI literacy among Turkish English as a Foreign Language students regarding their familiarity, knowledge, and ethical perceptions of AI technologies in academic writing. Using a descriptive exploratory approach, the study surveyed 427 students from two Turkish universities. Findings reveal a moderate level of AI familiarity and usage among participants, with a significant reliance on AI tools for translation and grammar proofreading. Despite recognizing AI's potential to enhance academic writing, students exhibited limited technical proficiency and understanding of AI's underlying mechanisms, highlighting a need for targeted and structured AI education for EFL writing. Moreover, ethical perceptions emerged as a critical dimension of AI literacy: while students acknowledged the utility of AI in improving academic writing, the majority expressed concerns about plagiarism and academic integrity, emphasizing the importance of transparent and responsible AI use. The findings contribute to the ongoing discourse on AI integration in EFL education, offering insights for policymakers, educators, and researchers to better prepare students for an AI-driven academic environment.