Artificial Intelligence (AI) has emerged as a transformative technology that is reshaping higher education by enhancing teaching, learning, research, and academic administration through intelligent tutoring systems, generative AI applications, automated assessment platforms, virtual learning assistants, and data-driven decision-support systems. Beyond improving technological capabilities, AI has significantly influenced behavioral transformation by promoting digital learning, collaborative engagement, self-directed learning, critical thinking, and academic productivity among students and faculty members. The present study investigated the level of artificial intelligence adoption and its influence on behavioral transformation in higher education using a quantitative cross-sectional research design involving 250 students and faculty members from higher education institutions. Artificial intelligence adoption was evaluated through AI-assisted learning, research support, academic writing tools, intelligent assessment systems, and digital collaboration platforms, while behavioral transformation was assessed through learning engagement, critical thinking, academic productivity, self-directed learning, and collaborative learning behaviour. Descriptive statistics, Pearson correlation analysis, and multiple regression analysis were employed to analyse the collected data. The findings revealed a high level of artificial intelligence adoption and a significant positive relationship between AI adoption and behavioral transformation. Participants with greater use of AI technologies demonstrated higher learning engagement, improved academic productivity, stronger digital collaboration, and greater self-directed learning. Furthermore, digital literacy, institutional support, faculty readiness, and technology acceptance emerged as the strongest predictors of successful AI adoption and behavioral transformation. The study concludes that artificial intelligence has become a significant catalyst for educational and behavioral transformation in higher education, and its effective integration, supported by institutional policies, digital competency development, and responsible implementation strategies, can enhance educational quality, research productivity, learner engagement, and sustainable innovation within higher education institutions.