This study analyzes the user chat logs and other artifacts of a virtual world, "Quest Atlantis" (QA), and proposes the concept of Negotiation for Action (NfA) to explain how interaction, specifically, avatar-embodied collaboration between native English speakers and nonnative English speakers, provided resources for English language acquisition. Iterative multilayered analyses revealed several affordances of QA for language acquisition at both utterance and discourse levels. Through intercultural collaboration on solving content-based problems, participants successfully reached quest goals during which emergent identity formation and meaning making take place. The study also demonstrates that it is in this intercultural interaction that pragmatics, syntax, semantics, and discourse practices arose and were enacted. The findings are consistent with our ecological psychology framework, in that meaning emerges when language is used to coordinate in-the-moment actions.