This study aims to investigate students’ perceptions of using Character.AI in reducing speaking anxiety. While most existing studies focus on designing effective prompts to obtain optimal AI-generated feedback, this study employs a qualitative phenomenological approach to explore students’ lived experiences in using Character.AI. The data were collected through questionnaires and interviews, and were validated using triangulation techniques. The findings revealed that most students feel more motivated and engaged during practice, as Character.AI provides a safe and non-judgmental learning environment that contributes to enhancing EFL learners’ confidence and willingness to speak in the future. However, the study also highlighted several challenges, such as lengthy and sometimes unnatural AI responses, as well as unstable internet connections. It showed that AI cannot fully replace human interaction. Therefore, it is important to maintain a balance between AI and human interaction in order to create more meaningful, engaging, and natural learning experiences.