This paper reports the progress of a pilot project exploring the integration of a collaborative virtual learning environment (Second Life) with the instruction of English courses at Lingnan University in Hong Kong. An educational partnership was developed with two TESOL teacher-training courses at Texas A&M University in the US. The project enrolled over 200 participants, with about half from each participating university. Coordination of online activities was done using the Moodle learning management system. A large non-traditional language learning facility was developed in the Second Life virtual environment in the style of a 1950's American diner on a private island, complete with Cadillac booths, traditional diner booths and tables, and outdoor campfire settings to facilitate conversational groupings. Both IM typed chat and VOIP voice interactions were explored inside the virtual environment. Student behavior observed during the study indicates the conditions which result in the most productive interactions, and also highlights several key problem areas which must be addressed before successful interactions can be achieved. This paper presents a process which has been developed and trialed, and the plans at Lingnan University to adopt it on a wider scale to support the development of language skills. (Contains 10 figures and 1 table.)