Recent technological advances in artificial intelligence (AI) have paved the way for improved and in many cases the creation of entirely new and innovative, electronic writing tools. These writing support systems assist during and after the writing process making them indispensable to many writers in general and to students in particular who can get human-like sentence completion suggestions and text generation. Although the wide adoption of these tools by students has been faced with a steady growth of scientific publications in the field, the results of these studies are often contradictory and their validity may be questioned. To gain a deeper understanding of the validity of AI-powered writing assistance tools, we conducted a systematic review of the recent empirical AI-powered writing assistance studies. The purpose of this review is twofold. First, we wanted to explore the recent scholarly publications that evaluated the use of AI-powered writing assistance tools in the classroom in terms of their types, uses, limits, and potential for improving students’ writing skills. Second, the review also sought to explore the perceptions of educators and researchers about learners’ use of AI-powered writing tools and review their recommendations on how to best ingrate these tools into the contemporary and future classroom. Using the Scopus research database, a total of 104 peer-reviewed papers were identified and analyzed. The findings indicate that students are increasingly using a variety of AI-powered writing assistance tools for improving their writing. The tools they are using can be categorized into four main groups: (1) automated writing evaluation tools, (2) tools that provide automated writing corrective feedback, (3) AI-powered machine translators, and (4) GPT-3 automatic text generators. The analysis also highlighted the scholars’ recommendations regarding dealing with learners’ use of AI-powered writing assistance tools and grouped the recommendations into two groups for researchers and educators.