Early childhood learning is an important concern for the concept building of children. Students have been taught with traditional methods from the beginning. However, these methods lack kids’ attention. Application of Augmented Reality (AR) in a traditional way of teaching can help students in better engagement and better learning. In this research, an ABCD-AR mobile based application is designed to overcome the flaws in the traditional education system. While designing AR mobile applications, certain guidelines need to be considered that cause problems for kids in their learning. These may include but are not limited to small screen size and irregularity. Considering these problems, this study proposes 23 usability principles for AR based learning applications for kids. These identified usability principles are validated by human experts. Furthermore, experiments are carried out to evaluate the application in terms of efficiency, effectiveness, learn-ability, user satisfaction & engagement. The results implies that the developed game-based application is highly effective and efficient because the mean of marks obtained by students before using ABCD-AR application is lower (M = 4.97, SD = 1.650) than the marks obtained after using ABCD-AR application (M = 7.97, SD = 1.608). Similarly, results indicate that mean of time taken to perform tests without using ABCD-AR application (M = 7.97, SD = 1.650) is higher as compared to with using it (M = 4.37, SD = 1.608). Majority of the students were entertained by playing the game while learning, and felt motivated to continue based on the game’s scenario due to the variety of activities included. Teachers and parents involved in these experiments have shown satisfaction towards the use of ABCD-AR application in learning process of preschool kids.