<p>Developing pre-service teachers’ classroom assessment literacy is critical to their future success, yet practical solutions for achieving this remain scarce in teacher education. This study introduces a sustained peer assessment strategy, featuring iterative peer feedback throughout the course, as a practical intervention to develop pre-service teachers’ assessment literacy in digital learning environments, with a particular emphasis on applied and ICT assessment literacies. The intervention is grounded in a conceptual framework that posits sustained peer assessment enhances assessment literacy through three key mediating mechanisms: evaluative judgment, feedback literacy, and calibration. An experimental design was implemented over one academic semester at two teacher education institutions in Vietnam, involving 165 pre-service teachers in the intervention and 175 in a control group. Pretest and posttest assessments were used to measure changes in educational assessment literacy. Results from a one-way ANOVA indicated that the experimental group’s assessment literacy improved significantly more than the control group’s (p &lt; .001), with a very large effect size (Morris’s <i>d</i>_<i>ppc2</i> = 1.65), demonstrating a substantial and educationally meaningful impact. Analysis of subdomains revealed particularly strong gains in applied and ICT assessment literacies for the intervention group. These findings underscore the effectiveness of sustained peer assessment in building assessment literacy. They also highlight the value of adopting this replicable, practice-oriented approach in teacher education policy and curriculum design to support pre-service teachers’ ongoing professional development.</p>