Augmented reality (AR) technology can enhance picture book reading experience. The present study aimed to explore the influence of reading AR picture books on primary school students' reading comprehension, story retelling, and reading motivation. Eighty second graders, who were from two classes at a rural primary school in a coastal city in East China, were recruited through convenience sampling to participate in this quasi-experimental study. The two classes were randomly assigned to be either the experimental group (AR picture book reading) or control group (print picture book reading), and both groups read three traditional Chinese picture books during reading classes throughout three weeks. T-test analyses revealed that, before the study began, the two groups did not have significant differences in reading comprehension, story retelling, or reading motivation. However, after the three weeks of instructional intervention, the experimental group significantly outperformed the control group in all three aspects. Furthermore, MANCOVA analysis showed that reading AR picture books was more effective in boosting participants' performance on implicit questions during the reading comprehension tests. They also performed significantly higher on story retelling tests, especially when it came to story structures regarding settings and plots. In addition, AR picture book reading was more conducive to improving participants' level of attention and confidence in reading. This work adds to the ongoing endeavors in incorporating AR picture books into classroom settings, and will inform future development of original Chinese picture books with AR technology.