This comparative case study examined the experiences of urban and rural elementary school students in Korea using PengTalk, an AI-based English learning application. Using a mixed-methods approach, the study analyzed student surveys, usage records, and interviews. Quantitative data were examined through descriptive statistics and Mann-Whitney U tests, while qualitative responses were analyzed thematically. Both groups expressed positive perceptions, especially regarding PengTalk’s gamified and interactive features. Urban students outperformed their rural peers in average scores (82.5 vs. 75.8) and cumulative totals (28,224 vs. 12,369). However, gamification alone was insufficient to sustain engagement, particularly in the rural school. Major challenges included limited digital literacy and inadequate instructional support in the rural school, as well as technical issues such as voice recognition errors in the urban school. The findings indicate that student engagement with AI tools depends not only on application design but also on contextual factors such as access, support, and digital infrastructure. This study concludes with recommendations for more inclusive and equitable AI-assisted language learning environments.