Generative Artificial Intelligence (GAI) is rapidly transforming higher education, yet its integration within Mechanical Engineering Education (MEE) remains insufficiently explored, particularly regarding the perspectives of faculty and students on its enablers, challenges, strategies, and psychological dimensions. This study addresses this gap through a sequential mixed-methods design that combines semi-structured interviews with faculty and students, along with a large-scale survey (N = 105) compromising 61 students and 44 faculty members primarily from universities in the UAE. Quantitative analyses employed the Relative Importance Index (RII) to prioritize factors, Confirmatory Factor Analysis (CFA) to test construct validity, and Partial Least Squared Structural Equation Modeling (PLS-SEM) to examine interrelationships. Results indicate convergence across groups: the top enablers include students’ willingness and tool availability for time efficiency; the main challenges concern ethical misuse and over-reliance reducing critical thinking; and the most effective strategies involve clear policies, training, and gradual adoption. CFA confirmed construct reliability after excluding low-loading items (SRMR ≈ 0.11; RMSEA ≈ 0.08; CFI ≈ 0.70). PLS-SEM revealed that enablers, challenges, and strategies significantly influence overall perceptions of successful integration, whereas psychological factors exert no significant effect. The study offers empirically grounded priorities and validated measures to guide curriculum design, faculty development, and policy formulation for the responsible and effective adoption of GAI in MEE.