Formative assessment is known for its positive effects it has on students' achievement. This study was designed to find out the effect of formative assessment on students' motivation at the higher education level. This study was experimental in nature; intact pre-test post-test control group design was used for data collection purpose. Sample of the study was selected conveniently, which comprised of undergraduate students. Students belonging to the experimental group were taught with instructional embedded formative assessment, whereas students belonging to the control group were taught with formal teaching methods. Students of both groups were required to fill a motivation questionnaire at the start and end of the study to check the level of intervention. Data collected through pre-test and post-test were analyzed using SPSS. The findings of the current study had suggested that instructional embedded formative assessment had a significant positive effect on students' motivation towards learning at the higher education level.