Language teachers are expected to engage in classroom assessment practices and report on learners’ progress aligned with proficiency standards, as well as prepare learners for external examinations. The term “language assessment literacy” (LAL) describes what the constituency of language instructors needs to know about assessment matters. Traditionally, a top‐down perspective has been provided for language teachers, such as through textbooks and testing courses. However, the result of this top‐down, decontextualized approach is that teachers often seem unable to influence and change the policy. Accordingly, this article reports on a study framed within sociocultural theory, in which a group of preservice English teachers applied Gal'perin's model of systemic theoretical instruction, brought into second language education as concept‐based language instruction (C‐BLI), to internalize and apply LAL concepts in instructional contexts. Results of the study suggest that C‐BLI was more effective than a top‐down, textbook‐based teaching approach in facilitating preservice teachers’ understanding of LAL concepts. It also helped them become active agents of their own language‐testing practice. Implications of the study are trifold. First, the C‐BLI intervention empowered preservice teachers on the design of classroom‐based assessments. Second, it brought positive washback to the instructional plan and English curricula. Third, the intervention helped form the dialectical unity of theory and practice, which contributed to the teachers’ professional development in English‐as‐a‐foreign‐language contexts.