Critical thinking (CT) and English literacy are two essential 21st century competencies that are a priority for teaching and learning in an increasingly digital learning environment. Taking advantage of innovations in educational technology, this study empirically investigates the effectiveness of CT‐infused adaptive English literacy instruction using a Moodle system. A one‐group pretest–posttest design was employed to evaluate the effect of the treatment on students' acquisition of CT skills (CTS) and English literacy. A total of 83 students enrolled in two sections of a general studies course at a large university in Taiwan participated in the semester‐long experiment. Adaptive learning was achieved through the use of an online Moodle system for (1) online grouping (based on pretest English literacy scores), (2) delivery of specifically designed adaptive learning materials for each group and (3) provision of individualised feedback. CT‐infused language activities based on social constructivist principles were designed for each level of adaptive instruction, whereas direct instruction for fostering CTS was provided in class and practiced or reflected upon in groups. Empirical results demonstrate that CT‐enhanced adaptive English literacy instruction simultaneously improved students' CTS and English literacy and that students' online discussions developed towards higher levels of interaction. This paper illustrates an effective blended learning model for adaptive instruction and offers recommendations for designing CT‐infused language learning activities that can successfully foster both CT and English literacy outcomes.