Background: Artificial intelligence is rapidly transforming healthcare and medical education. AI-based tools can support personalized learning, clinical simulation, assessment, decision-making training, and research development among medical students. Objective: To examine the integration of artificial intelligence in medical education and assess its perceived effectiveness, benefits, challenges, and future implications. Methods: A cross-sectional analytical study was conducted among 1,200 medical students and faculty members. Data were collected using structured questionnaires assessing awareness, usage, perceived usefulness, barriers, and attitudes toward AI in medical education. Results: Overall, 76.4% of respondents were aware of AI applications in medical education, while 62.8% reported using AI-based tools for learning or teaching. Personalized learning, virtual simulation, automated assessment, and clinical decision-support training were the most commonly identified benefits. Major challenges included ethical concerns, lack of training, data privacy issues, and unequal access to technology. Conclusion: Artificial intelligence has strong potential to improve medical education by supporting interactive, personalized, and competency-based learning. However, successful integration requires ethical guidelines, faculty training, curriculum reform, and responsible implementation.