Proficiency in written communication is an essential prerequisite for achievement in both academic settings and broader life contexts, yet many struggle with initiating writing and engaging in deep self-reflection and text revision. To address this challenge, this study integrated augmented reality (AR) technology with formative peer assessment (FPA)-based feedback methods to facilitate students' writing performance and higher-order thinking (HOT). An empirical study was conducted with 110 Chinese pupils, who were randomly assigned to three groups: a group using formative peer assessment and teacher assessment in a traditional lecture-based learning mode (TFPA); a group using formative peer assessment and teacher assessment in an AR environment (AR-TFPA); and a group using formative peer assessment and automated writing evaluation (AWE) within an AR environment (AR-AFPA). The results indicated that the TFPA approach negatively impacted students' writing performance and HOT compared to the AR-TFPA approach. While the AR-AFPA approach positively influenced writing performance compared to the AR-TFPA approach, no significant differences were observed in HOT. To better understand how FPA facilitates the writing process, we examined the mediating role of feedback types in the relationships between FPA approaches and writing performance/higher-order thinking. Mediation analysis revealed that the affective and cognitive characteristics of received feedback significantly mediated the relationships between the adopted approaches (i.e., TFPA vs. AR-TFPA; AR-AFPA vs. AR-TFPA) and improvements in writing performance and HOT. The present study aimed to provide insights into how integrating an AWE mechanism into AR-based FPA learning mode can potentially help learners' writing performance and higher-order thinking.