Digital electronics is a fundamental subject for engineering students, and it enables the students to learn design-based approaches and solve complex engineering problems. Students learn about minimization techniques for reducing the hardware components and size of the circuit by solving complex Boolean equations. The Karnaugh map (K-map) is one such technique utilized in digital electronics to solve complex Boolean equations and design AND-OR-INVERT (AOI) logical diagrams. The K-map technique involves several steps to solve the Boolean expression, and students often find it difficult to follow the K-map process. In this study, an AR-based learning system was developed using Unity 3D and Vuforia SDK that aimed to teach the students about the step-wise operation of the K-map technique. An experimental study was conducted with 128 undergraduate engineering students to determine the impact of the AR learning system on the critical thinking skills, learning motivation, and knowledge gain of students. The students were divided into two groups: experimental group (N = 64) and control group (N = 64). The AR learning system was implemented in flipped learning mode and utilized to provide in-class activities during the learning. The experimental group students utilized the AR learning system for in-class activities whereas control group students performed in-class activities using the traditional approach. The experimental outcomes indicate that the use of AR technology has a significant positive impact on the critical thinking skills, learning motivation, and knowledge gain of students. The study also found that critical thinking skills and learning motivation have a significant positive correlation with the knowledge gain of students in the experimental group.