Escape rooms are becoming prevalent in their use as a form of playful learning and gamification in higher education, often used for a multitude of purposes to enhance students' higher education learning experiences. Whilst studies have reported their valuable uses in a range of contexts, they have often focussed on undergraduates and fewer have explored their use in formative assessment practices. This case study seeks to address this gap by exploring the perceptions of postgraduate students in completing an online escape room activity as a form of formative assessment during an MSc lecture. Postgraduate students from the School of Psychology at the University of Surrey were invited to complete an online escape room as a form of formative assessment and took part in a follow-up qualitative survey to explore their perceptions of the activity not traditionally used in their course. The results from the case study showed that (1) the escape room was viewed positively by students as a novel and creative formative assessment practice, (2) the role of peers was important in the design of the assessment approach, and (3) students welcomed challenge and mastery of the learning outcomes and activity. This case study demonstrates initial positive findings about the use of escape rooms for formative assessment and advocates for further research to be conducted in this area. We also encourage HE teachers to think about how such practices could enhance students' learning experiences in their own teaching contexts.