With the advancement of blended learning and learning management systems, online formative assessment plays a critical role in helping students self-evaluate their learning progress and performance. However, there is insufficient research exploring the design of formative assessments in such settings. This quasi-experimental study aimed to assess the effectiveness of an online formative assessment model in a blended learning environment for higher education students. A total of 271 participants were divided into two groups: an experimental group with courses following the proposed assessment model, and a control group receiving traditional model. A survey was conducted at the end of the courses to measure students’ motivation and engagement. Propensity score matching was applied to confirm the sample balance between groups. Based on the matching findings, 78 students in each group were chosen for further analysis. The results from a t-test and qualitative data showed that the proposed assessment model significantly improved students’ motivation and engagement. It highlighted the importance of designing learning and assessment activities in blended learning environment. This model is expected to be applied broadly to test its utility in different majors in higher education.