Empirical studies on effects of formative assessment (FA) on motivational outcomes and underlying mechanisms are scarce. The core elements of FA, feedback and adaptive teaching behavior, might be helpful in promoting the experience of competence, which in turn is a prerequisite for promoting intrinsic motivation. However, instructional impact also depends on the students' perception of teacher behavior. Therefore, this study (N = 27 teachers and 613 students) aimed to test whether FA has a positive effect on intrinsic motivation mediated by students' perceived competence support (PCS). In a three-group design, two versions of FA were compared with a control group. In both versions of FA, teachers used a tool for learning progress assessment (LPA), while in one version, teachers received a combination of LPA and additional support consisting of materials for feedback and adaptive instruction (LPA+). A path model for half-longitudinal designs was estimated. Results support the motivational effect of FA. LPA and LPA+ both positively influence students' PCS which is in turn associated with higher intrinsic motivation. A small indirect effect on intrinsic motivation mediated by PCS was shown for both intervention groups, which was only significant for LPA. For LPA+, higher-performing students particularly benefitted from the intervention. Teachers' use of FA practices can foster students' PCS which seems to be a promising way in motivation-enhancing teaching.