This article investigates research on the use of network-based three-dimensional virtual worlds in computer-assisted language learning (CALL). The significant features of the major types of virtual world currently utilized are examined, as are the hypothesized advantages and issues associated with their use. This is followed by a critical review of the literature which reveals that contemporary research remains largely exploratory in nature and is subject to significant limitations. The literature review also identifies encouraging preliminary findings. These suggest that Active Worlds and Second Life present viable arenas for learner-based CALL projects. Positive findings identified in studies include evidence for beneficial forms of collaborative target language interaction, enhanced engagement, motivation, presence, and participation. The analysis draws attention to the need for learner training and consideration of educator roles. Further significant issues include the influence of task, technical affordances, and sociocultural factors on learner behavior. The article concludes by identifying areas of potential interest in future research. (Contains 5 figures, 2 tables and 1 note.)