<p>The rapid integration of AI in healthcare and medical education requires new pedagogical approaches to enhance AI literacy skills, critical thinking, and decision-making. This study examines a multi-stage framework combining dilemma-based learning with ChatGPT and chatbot development to advance AI literacy in healthcare management students. Through iterative engagement, students progressed from refining prompts in inquiry-based learning to developing chatbots as interactive tools and applying AI-driven simulations for real-world scenario analysis. This study examines the implementation of a structured, multi-stage learning intervention that integrates dilemma-based learning with AI tools, specifically ChatGPT and chatbot development, in undergraduate healthcare management education. A qualitative thematic analysis was conducted on the reflective journals of 71 students, capturing their experiences, skill development, and challenges encountered during AI-enhanced learning. Four main themes emerged: (1) Learning Through Questioning, (2) Learning Through Teaching and Prompt Refinement, (3) Learning Through Simulation, and (4) Struggles and Successes in the Learning Process. Findings highlight that AI-driven learning fosters prompt engineering skills, critical thinking, and engagement in problem-solving while also presenting challenges. Initially, students struggled with formulating effective prompts and structuring chatbot dialogues, but the iterative learning process enabled them to refine analytical skills, engage in multi-perspective dilemmas, and apply AI-based simulations effectively. This study underscores the need to integrate AI literacy and chatbot development into healthcare education to enhance students’ ability to navigate complex dilemmas and engage in interactive learning. These insights contribute to the broader discourse on adapting medical education to an AI-driven landscape.</p>