Contextual learning has been recognized as an important method for English as a Foreign Language (EFL) learning and drama was also usually employed to be a good activity for EFL learning which guided learners to interact and use body language to practice English. However, there were few studies to consider both drama and authentic contexts together with mobile devices to facilitate EFL learning. In this research, we developed a contextual drama (CD) system in mobile devices for EFL learning. Students can use CD system to prepare, make, and conduct drama with voices, photos, and texts in authentic contexts to improve English learning. Our goal is to examine how CD system and collaborative CD influences students' learning behaviors and achievement. One quasi-experiment design was conducted with 78 participants, who were the fifth-grade elementary school students during a 5-week experimental period. The results demonstrated that drama-based learning in authentic contexts resulted in better learning achievements than traditional methods. Moreover, we found that collaboration, as key in drama-based EFL learning, could promote peer discussion and therefore help students improve students' storytelling and writing abilities. Students' improved abilities were demonstrated in their sentence complexity and diversity. Additional analysis results derived from the interviews and observations also revealed that students' body languages usage and their engagement in drama activities have significant effect on their learning achievement.