Avatar use has been proposed as a method to address students' social anxiety and hesitancy to interact with other people in synchronous online environments. Nonetheless, there is a dearth of research examining the effects of avatar-based interactions on students' emotions and motivation. A quasi-experimental research was conducted to examine the effects of avatar-based interaction on students' self-efficacy, affects related to interaction, emotions, and learning outcomes in a synchronous video conferencing-based online learning environment. Seventy-one participants were recruited from three sections of one required teacher training course for elementary school pre-service teachers. All sections followed the same course structure and had the same learning content. Forty-three students in two sections were assigned to the experimental group and used avatar-based interaction. Twenty-eight students in one section was assigned to the control group and interacted using webcams. The results showed that the avatar-based interaction effectively alleviated students' concerns and negative emotions. We found no significant difference in perceived learning achievement between the two groups, although the experimental group showed the higher course satisfaction than the control group. The current findings support the potential mitigation effect of avatar-based interaction on social anxiety during video conferencing-based online learning. Avatar use can be an effective alternative to assuage students' social concerns, thereby fostering active engagement in social interactions within various synchronous online learning environments, such as the Metaverse.