This paper reports on an exploratory case study that investigates the synchronous interaction of intermediate level EFL learners in the 3D virtual world "Second Life." The subjects took part in three seventy-minute chat sessions that involved the use of affordances provided by a purpose-built world within this environment. Analysis of the data revealed that the context and tasks appeared to elicit a high degree of participation. The interaction was highly learner-centered, with the majority of messages exchanged between students. The analysis further indicated that the subjects overcame initial difficulties to produce coherent target language output focused on the tasks through collaborative interaction involving the use of five transactional and two interactional discourse management strategies. Transactional strategies identified in the data were the use of split turns, time saving devices, addressivity, upper case and quotation marks. Interactional strategies were the use of politeness and keyboard symbols. The majority of these represented transfers from strategies used in non-computer-based forms of communication. The others were adaptive behaviours appropriate to the online medium. The consistent use of these strategies enabled the subjects to manage their interaction in an effective manner. Learner feedback was largely positive, and indicted that participation appeared to engender high levels of motivation and interest. This paper concludes by identifying areas of potential in future research on the use of 3D virtual worlds in CALL.