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This study examines the impact of the use of Generative Artificial Intelligence (GAI) tools on pre-service teachers' AI literacy and prompt literacy in an GAI-enhanced learning environment. The study measured the pre-service teachers' change of Artificial Intelligence (AI) and prompt literacy after participating in AI-integrated activities . Results from paired samples t-tests revealed significant improvements in both literacies, underscoring the effectiveness of structured interventions and instructor guidance. The findings highlight the necessity of integrating AI literacy and prompt literacy into teacher education programs to prepare future educators for an AI-driven world. Emphasizing critical appraisal, the study suggests that intentional, guided instructional practices are crucial in fostering these essential skills for contemporary educators.