This paper reports on the task-based interaction of English as a Foreign Language (EFL) learners in the 3D multiuser virtual environment (MUVE) Second Life. The discussion first explores research on the precursors of MUVEs, text-based 2D virtual worlds known as MOOs. This is followed by an examination of studies on the use of MUVEs in Computer Assisted Language Learning (CALL). The discussion then focuses on an investigation of the Second Life-based text chat of learners located at a university in Japan. Data analysis reveals that the environment, and tasks, elicited types of collaborative interaction hypothesized as beneficial in the sociocultural account of language development. Collaborative interaction identified in the data involved peer-scaffolding focusing on lexis, and correction. The data further showed that the participants actively maintained a supportive atmosphere through the provision of utterances designed to signal interest, and the extensive use of positive politeness. These factors facilitated social cohesion, intersubjectivity, and the consistent production of coherent target language output focused on the tasks. Participant feedback was broadly positive, and indicates that specific features of Second Life such as individual avatars, coupled to the computer-based nature of the interaction, appeared to enhance discourse management, engagement, and participation. The findings suggest that Second Life provides an arena for learner centered social interaction that offers valuable opportunities for target language practice, and the development of autonomy. Areas of potential for future research are identified.